Lord Mance

The Right Honourable Sir Jonathan Hugh Mance, Knight, a Lord Justice of Appeal, having been appointed a Lord of Appeal in Ordinary and thereby created a Baron for life, by the style and title of Baron Mance, of Frognal in the London Borough of Camden—Was, in his robes, introduced between the Lord Hoffmann and the Lord Brown of Eaton-under-Heywood.

Lord Turner of Ecchinswell

Jonathan Adair Turner, Esquire, having been created Baron Turner of Ecchinswell, of Ecchinswell in the County of Hampshire, for life—Was, in his robes, introduced between the Lord Weidenfeld and the Lord May of Oxford.

The Lord Chancellor: Leave of Absence

Lord Falconer of Thoroton: My Lords, before business begins, may I take the opportunity to inform the House that I will be undertaking a ministerial visit to Nottingham on Friday 14 October? Accordingly, I trust that the House will grant me leave of absence.

Military Retrials

Lord Campbell of Alloway: asked Her Majesty's Government:
	Whether resort by the Ministry of Defence to retrial under the concurrent jurisdiction will be entrusted to the High Court and the extant discretionary process precluded.

Baroness Crawley: My Lords, where a case has been tried in the military system, any retrial will be in the same system. This is so even where the case could have been tried in either the civilian or the military system; that is where there was concurrent jurisdiction.

Lord Campbell of Alloway: My Lords, I thank the noble Baroness for her response. Is she aware that retrial for Trooper Williams, sought for reasons extraneous to justice, as recorded on 14 July, was also deviant from natural justice for want of notice to afford any opportunity for objection; and was granted in likewise deviance without reasons and in fundamental error, there never having been evidence upon which any jury, duly directed, could have convicted? In those circumstances, may the symbiotic process of seeking retrial under the concurrent jurisdiction, within the closet of discretion without the law, now be foreclosed on?

Baroness Crawley: My Lords, I am afraid that I have to disagree with the noble Lord. I do not like disagreeing with him but in this case I have to. As he knows, there was no trial in the military system in Trooper Williams's case. The commanding officer in this case had exercised his power to dismiss the matter without any form of hearing or trial. The effect of his decision was to stop any possibility of a military trial. As the charge was murder, our civilian courts also had jurisdiction, and the trial judge said that the prosecution had not behaved in some unprincipled way.

Lord Astor of Hever: My Lords, the Minister will be aware that the Attorney-General's decision to take the Trooper Williams case out of military jurisdiction, and the long delays in bringing the case to trial, have been enormously damaging to the morale of the Armed Forces. Five members of Trooper Williams's regiment still await a decision from the CPS over events alleged to have taken place in Iraq two and a half years ago. Should soldiers have to wait this long to clear their name?

Baroness Crawley: My Lords, the noble Lord is absolutely right; there should not be lengthy delays. Such delays are stressful for all concerned. The MoD is working hard to ensure that there should be as little delay as possible between investigation, accusation and the trial itself; such delay should be kept to a minimum. I could not agree more with the noble Lord. I am not able to go into detail on the specific cases he raises because they are under investigation.

Lord Garden: My Lords, in the debate on 14 July on the chain of command in the Armed Forces, we covered the Trooper Williams case in some detail, and the Minister's colleague, the noble Lord, Lord Drayson, accepted, at col. 1262 of Hansard, that there had been a great burden of uncertainty that Trooper Williams himself had personally had to bear. He assured the House that lessons had been learnt from this case, but time precluded him from telling us what they were. Will the Minister tell us what they were, how many have been implemented, and what progress there has been in putting extra resources into both investigation and legal personnel in the Ministry of Defence?

Baroness Crawley: My Lords, I am happy to tell the noble Lord, Lord Garden, that, following that debate answered by my noble friend in the summer, one of the lessons we have learnt concerns the role of commanding officers. This will come up when the House discusses the Armed Forces Bill in the coming year. We will consider commanding officers' not being able to dismiss any cases without first hearing them in a summary trial.

Lord Taylor of Blackburn: My Lords, does my noble friend agree that any case, whether military or civilian, that gets in the hands of lawyers is procrastinated over more than any other—especially, as when lawyers speak in this House, when two words are used instead of one?

Baroness Crawley: My Lords, it is always a joy to see our lawyer colleagues in the House, especially when a question such as this comes up. I am always delighted to hear what our lawyer colleagues have to say, however long it takes them to say it.

Lord Mayhew of Twysden: My Lords, I should like to test that assurance to the limit. Is it not the case that the prosecution of Trooper Williams was abandoned—dropped virtually at the door of the court—in the light of evidence that had always, from the very beginning, been in the hands of the prosecution?

Baroness Crawley: My Lords, I cannot agree with the noble and learned Lord. In answer to a question asked by the noble Lord, Lord Campbell of Alloway, I quoted the trial judge in the case of Trooper Williams. The trial judge did not believe that there was an abuse of process in that case. She said that the prosecution had not behaved in an unprincipled way. Plainly, in a case as grave as this, there was material before the prosecution upon which it was entitled to take a view that a prosecution was merited.

Secondary Schools: Citizenship

Lord Wallace of Saltaire: asked Her Majesty's Government:
	What progress has been made with respect to the development of the curriculum on citizenship in secondary schools.

Lord Adonis: My Lords, substantial progress has been made since citizenship became a statutory secondary school subject in 2002. Programmes of study have been developed alongside guidance by the Qualifications and Curriculum Authority. Some 1,000 specialist teachers will be trained by summer 2006. There are now 70 advanced skill teachers in citizenship. This year, there were 38,000 entries for the citizenship studies short course GCSE, an increase of 32,000 in two years, making citizenship the fastest-growing GCSE subject.

Lord Wallace of Saltaire: My Lords, I thank the noble Lord for giving me evidence of progress. Does he recall that the Chief Inspector of Schools said in a speech in January that citizenship is currently the worst-taught subject in secondary schools, and that the Association for Citizenship Teaching states on its website that this is a very loosely and poorly defined subject? A rough poll I conducted of sixth formers first produced confusion, and then answers such as, "It's mainly about drugs", or, "It's about what you should eat". Then one person said, "Oh, we had a lesson on the European Union".
	Does the Minister accept that part of the problem is that the Government are not able to define political rights, civil liberties and the role of Parliament in checking the executive because the Government are not entirely clear what they want people to learn about that?

Lord Adonis: My Lords, the noble Lord has strayed wide of the Question. Citizenship education has been taught in schools in a systematic way for only three years. During that time enormous progress has been made and I gave some of the figures. The substantial Ofsted report on which the chief inspector's findings were made was published soon after the introduction of the subject. Ofsted is compiling another report in which we will take a keen interest. However, significant progress has been made thanks in part to organisations such as the Citizenship Foundation which are working closely with schools and providing them with excellent materials, including on the function of the European Union.

Lord Elton: My Lords, what provision is made in colleges of education to train teachers to teach the subject? Calling up a subject out of space and putting it into the classroom without training is bound to lead to questions such as we heard from the Liberal Democrat Front Bench.

Lord Adonis: My Lords, 200 specialist teachers in citizenship have been trained each year since 2001. This year 240 places have been allocated with pressure from higher education institutions for more places because the course is so popular. We are therefore making solid progress, but we are starting from a base where there are almost no specially trained citizenship teachers.

Baroness Howe of Idlicote: My Lords, is the Minister satisfied that the vital role of parenting, with all the involved duties and responsibilities as well as the joys, is being adequately covered? The information I have received on that would give no one such a guarantee.

Lord Adonis: My Lords, parenting is not part of citizenship education; it comes much more within PSHE in schools. Substantial progress has been made on that and we are seeking to put in place a much more robust framework for the teaching of parenting and parenting skills in schools. There is no direct relationship with citizenship, but the role of citizens as parents is central to their role in society at large.

Baroness Walmsley: My Lords, is the Minister aware of the role of the parliamentary education department in helping teachers with the section in the citizenship curriculum on the government and constitution of Parliament? Is he further aware that when I have talked to such groups their main concern has been lack of training? The teachers are feeling under-confident that they can adequately teach these subjects. What are the Government doing to address that matter?

Lord Adonis: My Lords, as I said, we are seeking to train a much larger cadre of specialist citizenship teachers across the system which would meet those concerns. But we also welcome the work of the trust and the much wider work that Parliament itself can do to bolster citizenship education in schools, as was set out very ably, we thought, by the report by the Hansard Society chaired by my noble friend Lord Puttnam.

Lord Laidlaw: My Lords, I thoroughly commend the teaching of citizenship and, if the curriculum that I have seen is anything to go by, it will be a very worthwhile activity. However, is the Minister aware that the teaching of citizenship can happen only if the rest of the curriculum is squeezed? Are the Government considering any extension of the school day in order to be able to teach citizenship adequately?

Lord Adonis: My Lords, we are not considering an extension of the school day specifically to teach citizenship, which is a statutory subject that must be taught within school hours. However, we have an extensive programme of extending school hours for a wide range of activities, which will make possible a much greater range of provision in schools, including catch-up and other provision in respect of curriculum subjects that could well include citizenship.

The Lord Bishop of Coventry: My Lords, how do the Government hope to ensure that community service—an important part of the curriculum for many schools—is to be a significant feature of pupils' education?

Lord Adonis: My Lords, specifically in respect of citizenship, active citizenship counts as a third of the required activity in the new GCSE and is essential to what many schools do as part of their citizenship education. I recently visited colleagues who had been working with Deptford Green School—one of the most outstanding schools in the development of citizenship in south London—which had been very actively engaged in local recycling projects and, I was also told, in an investigation of the sale of cigarettes to under-16s by local shops, for which my briefing said that a short film was made on the subject and submitted as part of GCSE coursework. It does not say whether it led to any court action as a result. These sorts of activities are now widespread in schools as part of citizenship.

Lord Phillips of Sudbury: My Lords, I thank the Minister for his kind reference to the Citizenship Foundation, of which I have the honour of being president. Although many schools support citizenship with imagination and real endeavour, many do not—that is the nub of the Question—partly because citizenship currently has no place in the accreditation of schools. Therefore the quality of citizenship teaching does not show up in the league tables, which are so dominant. Are the Government planning to try to do something about that beyond the increase in GCSEs and half-GCSEs to which he referred?

Lord Adonis: My Lords, that is an important aspect of extending citizenship. As well as the half-GCSE, there are plans for a full GCSE and a full A-level in citizenship from 2008. I will look further at the issue of accreditation to which the noble Lord referred, but it is important that the accreditation for GCSE league tables relies on hard exam results. There are many activities that schools undertake which are very important to them—careers education, PSHE and so on—which do not count towards the performance tables.

Lord Kilclooney: My Lords, what kind of citizenship is being taught? Is it citizenship of the European Union, citizenship of the United Kingdom or both?

Lord Adonis: My Lords, the United Kingdom.

Historic Squares

Baroness Trumpington: asked Her Majesty's Government:
	Whether they have any proposals to prevent major road developments through historic squares.

Baroness Andrews: My Lords, Planning Policy Guidance Note 15 "Planning and the Historic Environment" makes clear that, wherever possible, roads should be kept away from listed buildings, conservation areas and other historic sites. Where this is unavoidable, local planning authorities should initially identify any features of the historic environment and evaluate their importance. Each proposed scheme would be subject to a detailed appraisal. This will take into account all the relevant assessment and impacts, including environmental and heritage.

Baroness Trumpington: My Lords, I am grateful to the Minister for her reply. She will know that I am particularly concerned with the future of much loved Sloane Square. Is the Minister aware of the local council's scheme to convert Sloane Square into a crossroad at the cost of at least £5 million? Is she further aware that English Heritage is against such a scheme? Does she agree that such a scheme would certainly add congestion to that historic area?

Baroness Andrews: My Lords, I am grateful to the noble Baroness for her advance warning about Sloane Square. She is absolutely right: it is a very well loved and important square. It has been recognised by Kensington and Chelsea council as such because it has done extensive work with local residents to develop a range of options. The council has now refined those options. There will be a further opportunity, probably early next year, to comment on them.
	In view of what the noble Baroness said about English Heritage, I am sure that its views will be taken into consideration. I understand that while it appreciates that there is a case for regeneration of the square, it is concerned about some of the details. The noble Baroness will know that I cannot comment further because it is a matter for the local council involved.

Lord Ezra: My Lords, in her supplementary question the noble Baroness, Lady Trumpington, referred to the position taken up by English Heritage. Is the Minister aware that in its representations English Heritage put forward a number of proposals for improvement of the square without changing its present shape or integrity? Will those proposals be seriously taken into account? Is she further aware that during the period of construction, if this project should go ahead of transforming the square into a road intersection, there will be major disruption lasting for one year or more and that a large amount of the traffic presently going around the square would be diverted probably into residential areas, and that the City of Westminster, which neighbours onto the square, has expressed reservations about this matter to its colleagues in Kensington and Chelsea? Is it not regrettable that such a much loved square, as the noble Baroness, Lady Trumpington, described it, should be changed in this way at a total cost, I am told, of some £7.5 million, including the contribution from elsewhere? Should this matter not be very carefully considered before being gone ahead with?

Baroness Andrews: My Lords, as I have said to the noble Baroness, I am absolutely sure that the views of English Heritage will be taken into account because it is a close partner in any development where there is any sort of threat to the historic environment. I also understand that there is a listed war memorial in the square, in which case listed building consent would also have to be sought. In terms of the way that the local councils relate to each other, that is something they will have to resolve themselves; although the noble Lord makes an obvious point about the disruption that is caused by these sorts of developments.

Lord Harrison: My Lords, I declare an interest as a member of the residents' association of Russell Square, whose traffic flows were recently disrupted by the July 7 bomb, but also by extensive road works leading on to Southampton Row. Perhaps I may ask my noble friend to turn her attention to access to the gardens of historic squares in London and elsewhere, which presently are open for only one day a year on open days which are much loved by Londoners, tourists and visitors. Could not more be done to give access to the wonderful gardens of these wonderful squares?

Baroness Andrews: My Lords, I think that the 600 squares in London are one of the great glories of the city. I would like to see them all open. One of the very interesting things that is happening is that English Heritage is working with the Heritage Lottery Fund to regenerate and develop squares, so I think that the noble Lord's suggestion should be put direct to those bodies.

Baroness Seccombe: My Lords, does the Minister recall the phase "If it ain't broke, don't fix it"? Can she tell the House what is so wrong with Sloane Square that it requires this vast amount money to be spent on it?

Baroness Andrews: My Lords, I know the phrase. Again I would not want to comment in detail because I have not seen the options and it would not be my place to do so. But I understand that there is some concern about pedestrian access, for example, and improving that. I think that we shall just have to wait to see the outcome of those deliberations.

Lord Brooke of Alverthorpe: My Lords, I declare an interest as someone who lives south of the river, just like the noble Baroness, Lady Trumpington. As something is broke there—the bridge—could not the Government take action to try to open that up quickly?

Baroness Andrews: My Lords, I have been in this job for very few months. But one of the things that I have noticed is that there is always somebody living somewhere and there is nearly always a bridge or a road involved.

Lord Colwyn: My Lords, I wonder if I might help the noble Baroness. Is she aware that, despite the concerns of my noble friend, local consultations have been commissioned and that Daniel Moylan, who is supervising the scheme, is happy that the planned changes to an area that was a crossroads before 1930 will reclaim unnecessary carriageway, resulting in an increased pedestrian area with less noise, less traffic and no alterations to public transport.

Baroness Andrews: My Lords, I am extremely grateful to the noble Lord for his contribution.

South Asia Earthquake

Lord Avebury: asked Her Majesty's Government:
	What measures they are taking to assist the victims of the Kashmir earthquake.

Baroness Amos: My Lords, following news of the South Asia earthquake, the Department for International Development immediately mobilised its emergency response system. In answer to a specific request from the government of Pakistan, search and rescue teams were sent to the affected areas. We have also sent a range of material assistance and are continuing to provide further help.

Lord Avebury: My Lords, may we extend our deepest condolences to the people of Kashmir on this appalling disaster which has cost the lives of perhaps 40,000 people and rendered several hundred thousand homeless and destitute? Since we have DFID officials on the ground co-ordinating relief efforts by the European Union, may I ask the Minister if we are now in a position to reassess our estimate of the scale of help which is needed and to upgrade the help which has already been given, for which we are most grateful to her and to the Secretary of State for International Development?
	Is the Minister satisfied that help is now reaching the people who are out in the open air, in freezing temperatures—not just in Muzaffarabad and Rawalakot, but also in areas such as Bagh, the Neelam Valley and the villages which seem not to have been reached by many of the aid agencies?

Baroness Amos: My Lords, I am sure that the whole House will join me in endorsing the initial comments by the noble Lord, Lord Avebury. With respect to whether or not aid is reaching everyone who needs it, there is undoubtedly a problem with infrastructure in some of the most remote areas. The reason that aid has managed to reach Muzaffarabad is because the Pakistan army repaired the road to enable that aid to get through.
	We are doing all that we can. The United States for example has provided some helicopters and we are seeking to do the same to enable food lift into those areas where going by road is extraordinarily difficult. It would be wrong of me to assure the House that we have managed to reach all of those areas; there are still remote areas that we are trying to reach with the UN.

Baroness Rawlings: My Lords, I would like to extend our condolences from these Benches too and would like to congratulate the Secretary of State and DfID with the non-governmental organisations on their rapid response in sending assistance to Pakistan. What measures are the Government taking to ensure that money sent will be invested in long-term prevention programmes, such as proper housing and emergency planning?

Baroness Amos: My Lords, the noble Baroness will know that there are always two phases to these operations. One is the immediate emergency need; the second phase is the longer term rehabilitation and reconstruction. In our longer term rehabilitation and reconstruction programmes we seek to ensure that a proportion of those programmes goes towards disaster management in areas such as this?

The Lord Bishop of Chelmsford: My Lords, does the Minister accept that one of the ways in which individual citizens can help with this is through the DEC appeal and that that has a very honourable record of ensuring that resources get very quickly to where they are needed? Would she further accept that from a political level, in an area of the world which is marked by huge poverty and very derelict infrastructure, there is an urgent need to press upon the parties to find peace in Kashmir?

Baroness Amos: My Lords, I entirely endorse the comments of the right reverend Prelate, and that is precisely why we have supported the moves by the Indian and Pakistani Governments with respect to moving towards long-term sustainable peace.

Baroness Whitaker: My Lords, will my noble friend confirm that not only was the UK the first government in the world to offer help after this awful disaster, but that they have collaborated in a most co-operative way with the aid agencies—for instance, paying for the transport of 800 tents for Oxfam and 19,000 blankets for Islamic Relief?

Baroness Amos: My Lords, my noble friend is right. The first search and rescue team came from the United Kingdom. We have also undertaken to pay for the transport of NGOs. It is also important to remember that this is a co-ordinated effort, with governments, the UN, the European Union and NGOs working together. We have had to learn serious lessons from the tsunami disaster, when co-ordination was not as good as it should have been, and we are trying to put them into practice in our response to this disaster.

The Earl of Sandwich: My Lords, I join other noble Lords in congratulating especially the Disasters Emergencies Committee, which has achieved an exceptionally rapid result in its co-operation with the media this time. There is a lot of concern about the individuals going out to Pakistan, many from the Kashmiri community here, and what happens when they arrive. Is the department particularly concerned about those groups of people, and what sort of guidance is she offering?

Baroness Amos: My Lords, this is an effort across government. The Foreign and Commonwealth Office sent out a consular team on the very first flight. Not only are we supporting British citizens visiting Pakistan but the British High Commission in Islamabad has established a desk at the airport to support those travelling out from the UK to look for, or support, relatives affected by the disaster.

Lord Roberts of Conwy: My Lords, in view of the frequency of such disasters, do the Government have any plans to enhance their reserves to deal with such calamities?

Baroness Amos: My Lords, the funding comes from different places, so to date we have never had a problem in our immediate emergency response. If over time there seemed to be a problem, I am sure that we would revisit this.

Baroness Falkner of Margravine: My Lords, the Minister will be aware that not only will the disaster affect Pakistani Kashmir in the here and now, but that it will have an impact in the future because a generation has been wiped out, affecting the number of teachers, medics and many other people whom Pakistan will need. Will the Government take a positive and sympathetic approach to long-term aid requirements, particularly in human development and infrastructure?

Baroness Amos: Yes, my Lords.

Lord Weatherill: My Lords, I think that I may be one of the few Members of your Lordships' House to have visited the part of Pakistan affected. The infrastructure, as the House well knows, is very difficult indeed. Is the Minister prepared from the Dispatch Box to applaud the mosques of the United Kingdom, which have been so generous in sending aid and people to Pakistan at this time, notably in my former constituency of Croydon?

Baroness Amos: My Lords, we must applaud the efforts of all who have contributed not only to the DEC but to individual NGOs, and that includes the Pakistani and Indian communities in the United Kingdom.

NHS Redress Bill [HL]

Lord Warner: My Lords, I beg to introduce a Bill to make provision about arrangements for redress in relation to liability in tort in connection with services provided as part of the health service in England or Wales, and for connected purposes. I beg to move that this Bill be now read a first time.
	Moved, That the Bill be now read a first time.—(Lord Warner.)
	On Question, Bill read a first time, and ordered to be printed.

Business of the House: Standing Order 41

Baroness Amos: My Lords, I beg to move the Motion standing in my name on the Order Paper.
	Moved, That Standing Order 41 (Arrangement of the Order Paper) be dispensed with on Thursday 20 October to allow the Motion standing in the name of the Lord Dholakia to be taken before the Motion standing in the name of the Baroness Scott of Needham Market.—(Baroness Amos.)

On Question, Motion agreed to.

Charities Bill [HL]

Report received.
	Clause 2 [Meaning of "charitable purpose"]:

Baroness Whitaker: moved Amendment No. 1:
	Page 2, line 10, at end insert "or belief"

Baroness Whitaker: My Lords, in moving Amendment No. 1 I shall speak also to Amendments Nos. 2 and 5. I hope that the outflux from the House does not signify the lack of their importance because their purpose is simply to protect European convention Article 9 rights in such a way that religious and non-religious belief is on an equal basis, to reflect the wording on international instruments and all our recent relevant legislation—the Communications Act, the Employment Equality Regulations and the Equality Bill—and implement the recommendations of the Joint Committee on Human Rights.
	Amendment No. 2 is simply a more felicitous phrasing of the clause to capture the same point. Amendment No. 5 is there to respond to my noble friend's concern in Committee that the wording then proposed linked charity law too definitely to any future evolution of the convention. In Committee, my noble friend said that the Bill conformed to the Human Rights Act. But putting non-religious belief under the catch-all heading is not only technically discriminatory, but implies that non-religious ethical belief is not equivalent in value to religious belief. It will inevitably lead to the development of different tests for religious and non-religious charities doing similar work and will reinforce the prevalent view that, for instance, humanism—I ought to declare my interest as a vice-president of the British Humanist Association—is not an ethical system on a par with religion but a set of opinions on a par with a political policy. All those are inconsistent with the Human Rights Act.
	Of course, one way to resolve this issue, if my noble friend is really claiming that non-religious beliefs do not need explicit inclusion, is to delete religion as well on the ground that it too is covered by Clause 2(2)(l). But surely we need not be so drastic. I beg to move.

Lord Hodgson of Astley Abbotts: My Lords, we have been round this point quite a lot before and the Minister gave us an exposé of the Government's position at col. 146 of the report of our proceedings on 28 June, which I have read with care.
	The problem that continues to trouble people is as follows. First, the definition now given in subsection (3)(a) is rather secular in nature. A religion is a religion. It does not address the issue in a way in which the definition adopted in Australia and New Zealand appears to do. More importantly, there is a mismatch between what the Government say the legal position is and how the Charity Commission practically applies it. I have a letter from the Association of British Muslims, which in a nutshell states that although the Government have introduced a clause that says that a religion can now include,
	"a religion which involves a belief in more than one god"—
	or a belief in no god—they have simultaneously said that that will not alter the criteria applied by the Charity Commission. Noble Lords will recall that the Charity Commission's criteria are that a religion has to involve a belief in and worship of a supreme being.
	If the Minister could unpick and address that issue—which he may say he has unpicked several times before—it will solve some of the concerns that are floating around and which are reflected in the correspondence to which I have just referred.

Lord Borrie: My Lords, we have been round this course before, as the noble Lord has just said. My colleague and noble friend Lady Whitaker has given voice to a further interest in this matter, because it seems unsatisfactory that the only belief that the Bill recognises for charitable purposes is one specifically recognised as a religious belief. That is unsatisfactory because there are bodies that are created for the betterment of mankind, for the furtherance of philosophical beliefs and for the furtherance of ethical understanding of the way in which people should behave. Provided those organisations are for the public benefit—of course, one has to establish both those points in order to be charitable under the Bill—they ought to be covered.
	My noble friend Lord Bassam, in the passages to which the noble Lord, Lord Hodgson, referred in Committee, referred to the possibility of a belief being furthered which was frivolous or bizarre. If there is an organisation established for frivolous or bizarre beliefs, how on earth could it pass the test of being in the public benefit? That is the substance of my concern about the Bill as it stands. I welcome the amendment that my noble friend Lady Whitaker has proposed.

Lord Phillips of Sudbury: My Lords, a self-denying ordinance at this stage is not a bad one, but I cannot resist reminding the House that Clause 2(2), which sets out the heads of charity, is not supposed to create any new law or extend the existing boundaries of charity, but merely to explain them and set them out in more understandable terms. In his response, the Minister may go some way towards rebutting the perfectly understandable concerns of the noble Lord who has just spoken. If he looks back on reading Hansard tomorrow, he may see that the description of non-religious bodies, which he would suggest might have charitable status, in fact, potentially goes hugely wide and might even include new Labour. I say no more and wait for the Minister's wise words.

Lord Bassam of Brighton: My Lords, I am very grateful for that introduction. While my noble friend Lord Borrie was speaking, I was thinking of one or two occasions when a bit of frivolity and bizarreness might definitely have been in the public interest. Sometimes I think that as I sit here on the Front Bench. However, perhaps I shall not dwell on that.
	As the noble Lord, Lord Hodgson, said, we have been around this issue on rather a few occasions. I can do no more than set out where we think we are. I owe it to my noble friend Lady Whitaker to do no less than that.
	For decades there have been charities promoting humanist, rationalist and other coherent and serious non-religious belief systems on the register of charities. Non-religious belief systems, such as those I have just mentioned, which promote moral and spiritual welfare are now, and will continue under the Bill, to be charitable. Subsections 2(l) and (4)(a) of Clause 2 secure that state of affairs.
	The Government are clear that the Bill has no discriminatory effects as between charities promoting religious belief and charities promoting non-religious belief. Indeed, the Bill further levels the playing field between religious and non-religious belief. At the moment, religious organisations enjoy a presumption that they are for the public benefit while organisations promoting non-religious beliefs do not. The Bill removes that presumption. That will mean that after the Bill is enacted organisations promoting religious beliefs will be in exactly the same position—that of having to demonstrate public benefit in order to qualify for charitable status—as organisations promoting non-religious beliefs.
	It has been argued that the Bill leaves non-religious belief at a disadvantage because it is encompassed by the catch-all provision of Clause 2(2)(l) rather than being expressly mentioned. That argument is based on the perception that the purposes within Clause 2(2)(l) are somehow lesser purposes. I do not share that view. They are not. More importantly, there will, once the public benefit presumption is removed, be no respect in which those purposes are treated in law or in practice any differently from any other charitable purpose.
	I remind noble Lords of some of the purposes covered by Clause 2(2)(l): preservation of public order; relief of unemployment; rehabilitation of ex-offenders; promotion of industry and commerce; promotion of agriculture, and so on. I would not belittle the promotion of non-religious beliefs to sit alongside those purposes, which are all very important areas of present-day charitable endeavour. But we cannot give everything that is charitable its own specific heading without making the list unmanageably long. Even if we had a very long list, we would still need a final category consisting of purposes that had not been specifically mentioned to avoid the risk of removing charitable status in error from any other recognised purpose which was not mentioned in our long list. Although I understand why my noble friend Lady Whitaker would like to see non-religious belief placed directly alongside religion, I can assure her that it would have no legal or practical effect.
	As I have said before in setting out the Government's position, by including the word "belief" in the list in the terms proposed by my noble friend's amendment we would bring in various types of belief system that, however worthy, should have no place in charity. Defining belief by reference to Article 9 of Schedule 1 to the Human Rights Act 1998 would not, in our view, overcome that objection. Article 9 concerns the freedom to hold, manifest and change one's beliefs, whereas our concern is, more narrowly, with beliefs, the advancement of which is likely to result in a public benefit. We do not agree that it is safe to allow all belief systems or philosophies into the list of charitable purposes on the grounds that the public benefit test would act as a backstop to exclude those that had no place in the domain of charity. We disagree with that argument because it is ultimately an argument for a definition of charity which does not have a list of headings of charitable purposes, but simply says that anything for the public benefit is charitable. That is not the route that we, or any commentators on the Bill, favour at all.
	Neither is it inconsistent of the Government to argue that non-religious belief need not have a specific reference in the Charities Bill while conceding that it needs a specific reference in some other legislation. In the Charities Bill, non-religious belief is already present in the list of charitable purposes by virtue of subsections (2)(l) and (4)(a) of Clause 2. That subsection brings in everything that has already been recognised as charitable but which does not come under any of the other headings listed in Clause 2(2). So, unlike with some other legislation, non-religious belief does not need to be imported into the Charities Bill; it is already present.
	I conclude by re-emphasising that the Bill as currently drafted provides every possible assurance and safeguard that it will remain a charitable purpose to promote moral and spiritual welfare through non-religious belief. It follows that we do not believe either that my noble friend Lady Whitaker's amendment is necessary or, for the reasons I have given, that it is desirable.
	I am advised that earlier in my reply I did not make it clear that I was referring to subsection (2)(l). I have a feeling that I have repeated that error. I hope that my noble friend will feel satisfied with that response.

Lord Wedderburn of Charlton: My Lords, that is the same answer that has been given many times now as we go round this course. We quite understand that human beliefs that are non-religious will never be accepted as expressly on a par. The Government are quite obdurate on that in a most remarkable manner. However, it enlarges—I am sure he will agree; he must have thought about this many times as we have met so often on this subject—the importance of the word "religion". I do not want to catch the Minister out on this. If he does not have a note on the matter perhaps he can write to noble Lords. Does religion involve worship?

Lord Bassam of Brighton: My Lords, I am inclined to ask the Bishop to respond.

Lord Phillips of Sudbury: My Lords, I can come to the Minister's aid. The answer is no.

Lord Bassam of Brighton: My Lords, that is a pretty good response.

Baroness Whitaker: My Lords, I am grateful to all noble Lords who have taken part in this commendably short debate. I am grateful to my noble friend for a well intentioned answer, which has given some useful comfort for those who will interpret the Act. I have to say I think that the Government's view is negative, behind the times and does not even keep up with their own legislation. But I have no intention of dividing the House and therefore I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendment No. 2 not moved.]

Lord Bassam of Brighton: moved Amendment No. 3:
	Page 2, line 20, at end insert—
	"( ) the promotion of the efficiency of the armed forces of the Crown;"

Lord Bassam of Brighton: My Lords, Amendment No. 3 stands in the name of my noble friend Lady Scotland.
	In Committee on 28 June the noble and gallant Lord, Lord Craig of Radley, moved an amendment which would have added the advancement of the effectiveness and welfare of the Armed Forces of the Crown to the list of descriptions of charitable purposes in Clause 2. The amendment attracted support from, among others, the noble Lords, Lord Phillips and Lord Hodgson. In my reply I promised to give further consideration to that matter and the amendment that I now move is a result of that consideration.
	In moving his amendment in Committee, the noble and gallant Lord, Lord Craig, explained why he preferred to refer to the effectiveness and welfare rather than to the efficiency of the Armed Forces. Noble Lords will see that we have reverted to "efficiency". The good reason for this is that efficiency of the Armed Forces is the heading under which all Armed Forces charities including service non-public funds are currently recognised as charitable. It is a judicially recognised phrase and expression. By including this phrase in the Bill, then by reason of Clause 2(5) it will continue to have the same meaning as it currently has in charity law. If a different phrase were to be used, the courts may assume that Parliament had intended a different scope for this charitable head such that purposes that are not currently charitable could be held to come within this head.
	Any purposes that are currently recognised as charitable but do not fall within our proposed phrase will continue to be charitable by means of Clause 2(2)(l) and Clause 2(4)(a). I beg to move.

Lord Craig of Radley: My Lords, I thank the Government for the amendment which copies word for word the amendment which I first submitted to your Lordships' Committee in Clause 2 on the Bill that was lost due to dissolution.
	I am delighted that the charitable purpose of promoting the efficiency of the Armed Forces of the Crown—and thus of some 15,000 service non-public funds which do so much to promote the well-being of the Armed Forces—is now specifically recognised in the Bill.
	Such purposes beneficial to the community, along with the relief of poverty, the advancement of education and the advancement of religion—the four charitable heads which arise from the 1601 statute—merit this explicit inclusion. I welcome that, though it would be interesting to hear the Government's reason for its placement in the list of purposes between Clause 2(2)(j),
	"the relief of those in need",
	and Clause 2(2)(k),
	"the advancement of animal welfare".
	My own preference had been for it to be up with other heads of charity, the relief of poverty and the advancement of education and religion. When he replies—and I do not wish to sound uncharitable or ungrateful to raise this point—can the Minister enlighten us?
	In response to my earlier remarks in Committee on 28 June, the Minister said:
	"The Government have ensured that the charitable position of service non-public funds is fully and properly protected by the Bill. There is no doubt about that".—[Official Report, 28/6/05; col.136.]
	His amendment is directly helpful to that position. But the Minister is aware of my concern expressed in Committee on 28 June—and I have since written to him about it—that a public benefit test could not become a bar to the charity status of service non-public funds.
	The meaning of "charitable purpose" in Clause 2(2)(l) requires two things: that the purpose falls within the list in Clause (2)(2); and is for "the public benefit". Given the Minister's statement, can he assure the House that SNPFs meet in full the meaning of charitable purpose as set out in the Bill? It would greatly reassure me if he would do so.

Lord Renton: My Lords, when dealing with charities, we must not become confused about responsibility for the Armed Forces. That responsibility is for those who command them and in particular, of course, the Secretary of State. To insert,
	"the promotion of the efficiency of the armed forces of the Crown",
	into this Bill is to misplace a purpose which deserves support. But whether this is the right place to put it is something which I rather doubt.

Lord Borrie: My Lords, the noble Lord, Lord Renton, has touched on an important point. I think that the Government have engaged in something of a volte face on this matter. In our earlier debates on this Bill we discussed the difference between promoting the efficiency of the Armed Forces, which is clearly the responsibility of this or any government, and matters such as the welfare of those serving in the Armed Forces, for which various charities already exist and justifiably are regarded as such. But the wording introduced by the Government seems rather odd and I would be glad if the Minister could explain how they have turned around 180 degrees on this matter.

Lord Bassam of Brighton: My Lords, the easiest response I can make is to say that we have been convinced by the arguments. We have listened to what has been said. I am grateful to the noble and gallant Lord, Lord Craig of Radley, for his energetic advancement of the cause of these particular charities.
	The noble and gallant Lord asked me a perceptive question on the positioning of the new line in the Bill. I have to confess that we shall have to bring forward another amendment because we have probably misplaced it in the list. We shall have to make a further subtle change in the drafting at Third Reading. So I am grateful to him for giving me the opportunity to explain the point to noble Lords. He is probably right to point out that it does not sit well next to animal welfare. However, I shall not dwell on that.
	In response to the other point raised by the noble and gallant Lord, I shall say simply that I am grateful to him for his letter, which I had occasion to revisit recently. It is fair to say that service non-public funds are subject to the public benefit requirement and they will continue to be subject to it. That is widely understood. The requirement will go on being applied by the Charity Commission. I hope that that clarifies the position.
	I have nothing further to add except to express once more my thanks to the noble and gallant Lord, Lord Craig, for his work on this issue.

On Question, amendment agreed to.

Baroness Turner of Camden: moved Amendment No. 4:
	Page 2, line 22, at end insert—
	"( ) A purpose described in subsection (2) is not excluded from that subsection by virtue of campaigning for changes to the law in any part of the world."

Baroness Turner of Camden: My Lords, the Bill says nothing about the extent to which a charity may engage in campaigning activities. I submit that there is some doubt about that because one publication from the Charity Commission states that,
	"no organisation can be charitable if . . . it is created for the specific purpose of carrying out political or propagandist activities".
	But in another publication the commission states:
	"By the very nature of their knowledge and social concern . . . some charities are well placed to play a part in public debate on important issues of the day and to make an important contribution to the development of public policy. Others will invariably be drawn into such debate. It would be wrong to think that this cannot and should not happen: it is open to charities to engage in campaigning activities".
	Certainly, as a former council member of the Save the Children Fund, I have accepted briefing from that charity which was intended to make an amendment to the previous Education Bill. I spoke on it and told the House that I was speaking to a brief from the Save the Children Fund so that the Government were quite well aware of where the information came from. I received a rather generous response from the Government on that occasion and it resulted in some changes to the law. However, there is some ambiguity about the matter.
	The amendment states,
	"by virtue of campaigning for changes to the law in any part of the world".
	That would of course include international organisations. We now live, as we are constantly told, in a globalised economy. The amendment would mean that organisations such as Amnesty International—I am not certain whether it is regarded as a charity—would be able to make representations to change the law in any part of the world.
	It is desirable to have this provision on the record so that there is no ambiguity about it. Without it, people will not be sure what their entitlement or responsibilities are. It is rather a good idea to have it in the Bill. I beg to move.

Lord Phillips of Sudbury: My Lords, I am sympathetic to what I take to be the intent of the noble Baroness, Lady Turner, but I am afraid I have to express my objection to the amendment because I think it would have consequences which she does not intend.
	At present, the crucial distinction in terms of political campaigning is between charities whose purposes, objects and aims in their constitution state that they are for a change in the law, here or elsewhere, which is impermissible and, by contrast, political campaigning as a means of achieving non-political objects or aims. I fear—perhaps the noble Baroness intends this—that the amendment would be construed as allowing as charitable objects, purposes or aims which explicitly charge the organisation with a change in the law, whether here or elsewhere.
	I believe—I have had many causes and cases to consider this very carefully—that one of the fundamental and virtuous bases of our whole charity structure is that charities should not be in existence to change the law. The traditional judicial argument against that is: "How are we the judges able to judge between one proposed change in the law and another, or between the status quo and a proposed change in the law?". It would make their role impossible, because by what yardsticks would they be able to double-guess Parliament or public opinion more widely? Therefore, since I believe that public support for the notion of charity is essentially bound up with the non-party-political nature of charity, this amendment would, inadvertently, I know, be an Exocet under the waterline of the charity sector as a whole. I put it as strongly as that.
	The only point that I would add which should be of solace to the noble Baroness—and I think she knows it—is that the guidelines for campaigning by charities are now extremely wide and generous. For example, if a piece of legislation comes up, a charity can campaign strongly in respect of that legislation and claim that an aspect of it would be inimical to its charitable purposes. For example, Shelter has in times past gone very public and very political—non-party political—in resisting or supporting change in housing law. That is permissible so long as it fulfils very sensible guidelines.
	The scope for charities to engage in strong political action is already with us. For the reasons I have attempted briefly to explain, the amendment would inadvertently create evils that would be really serious.

Lord Bassam of Brighton: My Lords, under the existing legal framework charities may engage in campaigning so long as it is in furtherance of their charitable purposes. Of course, organisations that exist solely to pursue political purposes cannot be given charitable status. We think that that is right; the words uttered by the noble Lord, Lord Phillips, coincide with our views.
	The extent of charities' freedom to campaign has been strongly supported by government. In 2002 the Strategy Unit published its report, Private Action, Public Benefit, which recommended that the Charity Commission's guidance on the subject be updated and revised in order to place greater emphasis on the campaigning and political activities that charities can engage in. When the commission subsequently published revised guidance in 2004 it was widely promoted and welcomed extensively across the charitable sector. Its enabling approach highlighted the freedoms of the existing legal framework.
	On the issue of charities campaigning specifically for a change in the law, they are already free to support or oppose the passage of parliamentary Bills if such support or opposition is in furtherance of their charitable purpose. Daily we receive missives from charitably funded organisations doing exactly that. Charities working internationally may seek to promote a change in legislation or public policy on the same principle: that the change is in furtherance of their charitable purposes.
	As I said, the commission's guidance, which set out the current legal position on campaigning and political activities by charities, was welcomed and the commission is not aware of any strength of feeling from the charitable sector on any need to alter or change it at this stage. For those reasons, although I am sure that the amendment was moved with good spirit, and attractive as it is, we cannot give any support to it.

Lord Wedderburn of Charlton: My Lords, my noble friend has clearly and explicitly explained the Government's position. I am sure that he will tell me if I am wrong, but as I understood him, if one has objects that fall within Clause 2 in the necessary list and can therefore advance to the public benefit test, the fact that one is campaigning on issues that relate to that object does not prevent one from being a charity. If that is so, why does he not accept the amendment? It says that a purpose in subsection (2), which is what first has to be met,
	"is not excluded from that subsection by virtue of campaigning for changes in the law".
	I thought that that was more or less what I had said in the first proposition. The noble Lord, Lord Phillips, raised political campaigning: as soon as we put that in there are problems. If a charity is founded for the object of whatever the noble Lord means by political campaigning, it will not meet—

Lord Evans of Temple Guiting: My Lords, I must remind my noble friend that we are on Report, and once the Minister has sat down there is no more discussion.

Lord Wedderburn of Charlton: My Lords, I commend my noble friend's assiduous looking at the rules, but this is an important point. There are dozens of charities that campaign and they want to know the answer. I want to know why I have misunderstood the Government's position when they are rejecting what they appear to approve of.

Baroness Turner of Camden: My Lords, I thank the Minister for his response and also the noble Lord, Lord Phillips of Sudbury, for his helpful intervention. He said that he sympathised with the objectives and I am sure that most people do. I gave an instance of one case with which I had personally been involved, where I had spoken on a brief for a charity that was anxious to change the law in an area where it obviously had an interest: Save the Children was interested in the Education Bill and the Government were prepared to accept what I had to say as a result of its campaigning.
	I was simply seeking to ensure that that kind of lobbying and campaigning was clearly something that a charity could do because it was in line with its objectives. As my noble friend Lord Wedderburn said, I sought to encompass that by referring to,
	"A purpose described in subsection (2)",
	which would bring it within the public benefit test. If a charity passes the public benefit test, it should be granted in law—in the Bill, which will eventually become an Act—the status to campaign for changes in the law within its own remit. That is all that we sought to do—to ensure that a charity that had a particular area of activity was able to campaign for changes in the law within its own remit. That is all we were after. I am sorry that it has not been possible for the amendment to be accepted. I shall perhaps think of a different wording with which I can return before the Bill finally leaves this House. However, in the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendment No. 5 not moved.]

Lord MacGregor of Pulham Market: moved Amendment No. 6:
	After Clause 3, insert the following new clause—
	"ORGANISATIONS CHARITABLE UNDER EXISTING LAW WHICH CEASE TO BE CHARITABLE
	(1) This section applies to a body or trust charitable under existing law which ceases to be treated as charitable owing to the practical difficulties of complying with section 3.
	(2) A body or trust referred to in subsection (1) shall be called a "former charity".
	(3) The Commission shall ensure that all the assets and liabilities of a former charity shall be vested in a community interest company as defined in the Companies (Audit, Investigations and Community Enterprise) Act 2004 (c. 27)."

Lord MacGregor of Pulham Market: In moving Amendment No. 6, I declare an interest as the deputy chairman of the Association of Governing Bodies of Independent Schools. I do so because the point that I am about to raise concerns independent schools—normally it applies only to a very small number; in fact, it applies only to a few—but it could apply also to other charitable trusts, institutions or charitable companies.
	I say straight away to the Minister that no doubt he will find defects in the drafting. There could well be wider repercussions from the proposed new clause. Therefore, I do not intend to press it. However, it is a convenient way of raising an issue that arose in our Committee debates during the previous Parliament. On that occasion, the Minister, although sympathetic to the point, was unable to give a firm response. Today, I seek a fuller and, I hope, more reassuring response or a promise of a better answer to the problem than my proposed new clause contains, either on Report or when the Bill goes to the other place.
	I shall explain the point and give the independent school situation as an example of the problem. In Committee both before and after the election, we had considerable discussion on independent schools, and I do not intend to go over that ground today. Suffice it to say that there is full acceptance among independent schools of the public benefit test, and it has been met on an increasing scale in many ways over the past 10 years—for example, through the provision of bursaries to help pupils from lower income families attend independent schools. About 30 per cent of all places now have a bursary of one sort or another. There is also the sharing of facilities in the wider community; a considerable amount of that is taking place. There is movement between the maintained and independent sectors as regards teachers, employment and recruitment and in many other ways. The Government are encouraging private/public partnerships between the two. So there has been full acceptance of the public benefit test, but some schools—as I say, it will probably be very few—will have overwhelming difficulty in meeting the test. I think in particular of small schools in isolated rural areas with fairly slender financial resources that can neither share their facilities because there is no one to share them with or have real difficulty in providing bursaries on any scale.
	If schools in that situation lose their charitable status because they cannot satisfy the public benefit test, they lose the tax benefits that go with charitable status. That is fully accepted. However, it seems extremely unfortunate that if the assets cannot be used for a similar charitable purpose, the school or hospital will have to close down. It is unlikely that another charitable trust or company would be willing or able to take it over as a school because it, too, would have difficulty meeting the public benefit test for the same reasons.
	Before the election, the noble Lord, Lord Goodhart, tabled an amendment in Grand Committee on 3 February 2005—the reference is col. GC7 of Hansard—to deal with the point. In so doing, he referred to his experience as a lawyer in advising schools on the problems that arise when an organisation ceases to be a charity. Similar concerns arising from this Bill have been expressed to me.
	The Charity Commission's document on public benefit contains this passage:
	"However, in extreme cases,"—
	I have already referred to their being extreme, but there will be some—
	"where the trustees are co-operating with us but the organisation simply cannot in all the circumstances provide public benefit"—
	precisely the situation that I am describing—
	"our action might include removing the charity from the register and making a legal scheme where necessary to ensure that any charitable assets of the organisation will in the future be applied for other charitable purposes close to any purposes that have ceased to be charitable. This would only happen where it was not possible for an organisation to meet the public benefit requirement".
	That sounds sympathetic and is obviously intended to be helpful, without entirely meeting the point.
	There are three ways in which the point can be met. The first is by use of the cy-près doctrine, which I presume is what that passage in the Charity Commission document really refers to. I am no lawyer, but the problem with it is in not properly dealing with this issue: what are the "charitable purposes close to"? If they are educational, and they have to provide those wider public benefits to meet the test, they will probably be providing educational services of a different sort, but not as a school. Therein lies the problem that is not actually dealt with; that of closing the school as such.
	Secondly, my new clause would be a way of dealing with it. It would mean that the school would continue to pursue its original charitable purpose and would become essentially a not-for-profit company. There is a connection, because, under the Companies (Audit, Investigations and Community Enterprise) Act 2004, in Clause 26(3),
	"A community interest company established for charitable purposes is to be treated as not being so established and accordingly—
	(a) is not a charity".
	That is clearly a reference to the point that they may have been charitable but have become a community interest company. It would mean not having the tax benefits, but they would be able to continue.
	Thirdly, could the Charity Commission give a commitment—the Minister could confirm this—that the use of the phrase "treating proportionately", which is now added to the Bill, would mean that different considerations would apply to a school—for example, one in a remote rural area—unable either to provide bursaries or make facilities available to the wider community because, by definition, there is no demand? Such schools would be treated differently from a Winchester or the many schools that can make their facilities widely available to other organisations and provide a lot of bursaries. That would enable the former schools to satisfy the test and continue in existence.
	A school of that sort would obviously have to provide sufficient proof that it had used every endeavour to meet the public benefit test. That is the point of the new clause. I hope that the Minister will make some sort of constructive response to reassure schools that might find themselves in that situation. I beg to move.

Lord Shutt of Greetland: My Lords, I am having great difficulty with the amendment. It has always been the case that turning assets into charitable assets is a one-way track. There is no way back. Therefore it seems to me, if this were to be a right clause, that in the first instance a very substantial clause would be needed, explaining how a charity could become a non-charity. What is in front of us applies if it "ceases to be charitable". I do not believe that can possibly happen under what we understand as charitable law. If it were passed as such, I do not understand how that fundamental would come along at all.
	I do not believe there is such a thing as a former charity. In the examples given, it seems to me that if somebody took the view that they have an asset that now has charitable status but felt that the asset could not be operated under charity law, it would be their duty to sell that asset. They could sell a school and, provided it was sold at proper value, no doubt the original charity could dispense bursaries and do all sorts of charitable activity. I would like it to be explained to me, if possible, whether there is a route back from charitable status. If there is a route back, it is not just about this; it is about the whole complex of charities.
	Once you have taken a five pound note out of your pocket and handed it over, that is charitable money. As I understand it, there is no route back. If there is a route back, I would like to have it explained to me. If there is an intention that there should be a route back, it will need a lot of clauses beyond this and a heck of a lot of thinking about.

Lord Forsyth of Drumlean: My Lords, I support the amendment proposed by my noble friend, which seems very sensible. I say to the noble Lord who has just sat down that it is a bit rich to talk about how charitable assets can become non-charitable and how once you have gone one way that is the end of it. The Government are seeking to change the rules of the game. Up until now, certainly for most of my life, it has been understood and assumed that education in itself was a charitable purpose.
	I do not wish to go back over the arguments that have taken place already on the Bill. However, some people are earnestly trying to provide—sometimes for many hundreds of years—a charitable, educational purpose, and the changes that this legislation will bring about, depending on the attitude of the commissioners, will put them in considerable difficulty. My noble friend has pointed—if I may say so, in his typical, reasonable way—to a way forward without embarking on what might be a rather more partisan view of what exactly is going on behind the Bill and the hardships that will be caused to organisations that are, to my mind, fulfilling a worthy purpose and that are being threatened by a change in the rules brought about by the Government and by narrow prejudice.

Lord Hodgson of Astley Abbotts: My Lords, like my noble friend, I have not had the problems that the noble Lord, Lord Shutt, has with the amendment. It may be defective in its precise drafting but not in the purpose behind it.
	As has been said, we debated the matter extensively in February on an amendment proposed by the noble Lord, Lord Goodhart. I have a couple of points to add. First, recommendation 105 from the joint scrutiny committee, which the noble Lord, Lord Goodhart, quoted extensively in January, urged the Government to provide an answer to the conundrum that the amendment proposed by my noble friend now has to pick up on. It is not as though the Government have not had notification of the problem going back to the joint scrutiny committee's report, which was published over 12 months ago.
	The issue for the noble Lord, Lord Shutt, as pointed out by my noble friend Lord Forsyth, is that we have removed the presumption. When you remove the presumption for charitable purposes, the charitable status of some schools and hospitals will be thrown into sharp relief and a few, as my noble friend has said, may fail the public benefit test. There will be a gap that we must address. My noble friend has made a reasonable proposition on how it could be done. The asset lock on the CIC, the community interest company, provides the sort of protection that the noble Lord, Lord Shutt, was looking for.
	I hope that, if the Government are not prepared to accept the amendment, they will come forward with a proposal to address that gap. Whatever the rights and wrongs of it, there is a gap, and how many individual charities will be affected by it we cannot tell yet. It would be wrong for us to let the Bill leave this House without having put forward some coherent method of treating it, as the joint scrutiny committee recommended in its recommendation 105. I support the approach proposed by my noble friend.

Lord Phillips of Sudbury: My Lords, one cannot fail to understand what the noble Lord, Lord MacGregor of Pulham Market, is getting at. As the noble Lord, Lord Hodgson, has just said, the joint scrutiny committee report referred to this difficulty, and left it a bit in the air.
	The answer to the dilemma described by the noble Lord, Lord MacGregor, is in the present law, which broadly says that once assets are charitable, they remain so. It is common enough for charities to find themselves in difficulties for one reason or another, and not uncommon for the trustees of a charity to decide that they will in effect cease to function as a charity, and function thereafter as a non-charity—maybe as a non-profit company, occasionally as a profit company. The charity's net assets are then ring-fenced, and are usually acquired by the profit-making or non-profit-making entity at a market price, so their value remains within the charity net, and can be used, in this instance, for educational purposes.
	I do not, therefore, see why we need the amendment at all. There is a danger in the amendment. First, the noble Lord, Lord MacGregor, said that he is looking only at rare cases.

Lord Hodgson of Astley Abbotts: My Lords, I am sorry to interrupt the noble Lord's persuasive train of thought, but he was a member of the joint scrutiny committee. Paragraph 105 of its report states:
	"We recommend that the real Bill should include provisions to clarify the effect of the loss of charitable status on the assets of a charity".
	He thinks that is not necessary, despite the recommendation of the joint scrutiny committee of which he was a member.

Lord Phillips of Sudbury: My Lords, the noble Lord has got me with my trousers down. Basically, though, if the Bill were to clarify in the words of that recommendation, it would reiterate the present law. I believe that the present law is capable of dealing with this point.
	To come back to what was put to us by the noble Lord, Lord MacGregor, he referred to very rare cases. I do not see how his assurance that every endeavour would have been made to try to run the school as a charitable school is in any way protected in the amendment. There is no reference whatever to that. It does not even say who decides whether the charity shall cease to be charitable, and who is going to judge when the practical difficulties are such that it is to be treated as no longer charitable.

Lord MacGregor of Pulham Market: My Lords, I made clear that I recognised that this way of getting the issue debated on the Floor of the House was not the ideal way of solving the problem. I remind the noble Lord that his own colleague, the noble Lord, Lord Goodhart, did not agree with him that the present law would deal with the situation. What I had in mind when talking about every reasonable endeavour was that the Charity Commission would take that into account in allowing it to pass the public benefit test—my third option.

Lord Phillips of Sudbury: My Lords, I still have to say that the situation is not sufficiently covered in the amendment, although I accept what the noble Lord said, that this is to get the issue into play, perhaps for Third Reading.
	Although the charity interest company—the so-called "CIC"—puts a lock on the assets, it has a huge hole in it, which was raised when the Bill was passed, but the Government refused to do anything about it: there is no limit at all under that format for the remuneration that can paid, and the bonuses drawn out, by the directors of the entity.
	The London Clinic, for example, is a charity, but I am not aware other than that it charges top whack for services it renders its patients, and that it remunerates top whack to consultants who perform operations there. I am not sure where the London Clinic would go under the noble Lord's formulation. At the moment, the only charitable endeavour that it seems to me to fulfil is based upon the assumption that anything done of a medical nature is ipso facto charitable. Indeed, the noble Lord, Lord Forsyth, was criticising the Government for moving to a public benefit test for education, although I do not agree with him.
	I am trying to help the House and to get the noble Lord, Lord MacGregor, if and when he comes back with this, to take account of some of the points I have made. The provision could provide a coach and horses to drive through the net of charity assets, which is hugely important. I am sure he will agree that the public, if they have been donating regularly to a charity out of their own pockets, will not be impressed when after five years the trustees decide that it is no longer practicable to run the charity in the way they want and then shove the lot into a non-charitable entity and become paid trustees. There is no limit with a CIC on the payment of trustees so they could then remunerate themselves and do so handsomely.

Lord Bassam of Brighton: My Lords, I am grateful to the noble Lord, Lord MacGregor, for bringing this amendment back after such a long gap. It has provided a useful opportunity for Members who took part in debates in Committee to re-examine it. I hope that my comments will be helpful and will offer some reassurance to the noble Lord, Lord MacGregor. As the noble Lord, Lord Phillips, said, this is a tricky area and the law of unintended consequences may well be at work if we interfere with a fair settlement of the legislative position.
	It will continue to be for the Charity Commission to ensure that organisations claiming charitable status satisfy the public benefit requirement as well as having purposes which are charitable. The commission—and the law—recognises that charities cover a diverse range of purposes. While every charity must be set up for the benefit of the public, the law does not adopt the same practical measures to assess public benefit in every type of case. This means that the ways in which public benefit can be demonstrated can differ for different charitable purposes, so there is flexibility.
	The commission will of course be under a statutory duty, in performing its functions, to have regard to the principles of better regulation; that is, the principles under which the regulatory activities must be proportionate, accountable, consistent, transparent and properly and effectively targeted. Its functions to which these principles apply include consulting on public benefit guidance and determining whether the public benefit that particular organisations deliver is enough to satisfy the public benefit requirement.
	There might, however, be some charities which the Charity Commission, in carrying out public benefit checks, finds are not meeting the public benefit requirements. That is what the amendment identifies and what the noble Lord, Lord Shutt, was thinking through in his contribution.
	The clear majorities of charities found not to be meeting the public benefit requirement would be likely to be capable of meeting that requirement if they changed the way they operated. We all understand that. The Charity Commission would, to the extent of its powers, facilitate the making of such changes by the charity's trustees. But other charities—and a small number, we believe—might be, as it were, institutionally incapable of meeting the public benefit requirement however they sought to operate. It is these few cases with which the noble Lord, Lord MacGregor, is concerned.
	What happens to a charity's assets if it ceases to be a charity? The current law is based on the notion that, once assets have entered the domain of charity, it is desirable to keep them there so that they can be used in perpetuity for charitable purposes. The rule that gives effect to this position is the cy-près rule and we have discussed that on a number of occasions. It allows the court or the Charity Commission to alter the purposes for which assets are held once those purposes have ceased to be charitable. In altering purposes in those circumstances, the court or the commission would ensure that the altered purposes were charitable ones very similar to the original ones that had ceased to be charitable. I stress "very similar" to reassure the noble Lord that the assets of an educational charity would always have to be used for educational purposes. Therefore it would have that necessary and important constraint.
	So in those few cases the Charity Commission could make a legal scheme changing the charity's purposes in the way that I have described. The assets would remain within the realm of the charity, either in the hands of the same trustees or, if the scheme transferred the property to another charity, in the hands of different trustees. That would be the preferable outcome. The effect of the amendment of the noble Lord, Lord MacGregor, would, by contrast, be to remove the assets from the realm of charity, since a community interest company can—even if its purposes are wholly charitable and it meets the public benefit requirement—never be a charity. A community interest company does not receive the favourable tax treatment that a charity receives, so there would be a real financial disadvantage as well.
	It is for those reasons that we believe that the amendment of the noble Lord, Lord MacGregor, would be counter-productive. That is not to say that it has not been useful in enabling us to flesh out some of our thinking and raising some of the awkward issues that might arise if—

Lord Forsyth of Drumlean: My Lords, I would like to ask a question. In the case, say, of a school which could not meet the public interest test for reasons that we understand, he is saying that the assets could be transferred for an educational purpose. I understand that. But what I find very difficult is, if the trustees who are running a school cannot make it work because they have lost their charitable status, how on earth could someone else come along and use these assets? If the answer is that they have to buy the buildings, given that these schools are run marginally, surely the effect would be that we will end up with a black hole, with nobody able to deal with it. Could he explain to us what he meant when he said that this transfer would be possible because I cannot see in practical terms how that could come about?

Lord Bassam of Brighton: My Lords, the noble Lord is right. Of course it would be possible for the trustees to sell the school as a going concern to a private company, and one's expectation would be that that would be done in the knowledge that adjacent charitable purposes would take effect. Otherwise the disposal of the assets would not work. That is how we see it in operation. One would expect that anybody taking on those assets would do so in the knowledge that they had a workable scheme. I am sure it is not unknown—the noble Lord, Lord Phillips, will know more about this than I—for such situations to arise and for there to be have been a useful transfer of assets and a continuing and effective charitable purpose.
	I think instances of this sort will be very few in number, but the noble Lord, Lord MacGregor, and the Committee session in particular made a very persuasive case for some consideration to be given to this point, and we have given it very careful consideration. The noble Lord, Lord Phillips, is right that the law as it is should work and should be effective, and should enable the continuation of a useful and valuable charitable purpose even where an organisation can no longer operate in the way it was originally intended, but with the adoption of a new scheme can give effect to the broad thrust of the original charitable intent.

Lord MacGregor of Pulham Market: My Lords, I thank my noble friends Lord Hodgson and Lord Forsyth for their support. I would say to the noble Lord, Lord Phillips, that I think that we are in agreement that the solution that I have put forward for the purposes of the debate today has a lot of defects. Indeed, I say so myself and I fully recognise the wider consequences. I tabled the amendment in order to have the debate. I am not completely satisfied that the Minister's answer, that it can be dealt with under the existing law, is correct to deal with those situations. But I am most grateful to the Minister for the further explanation he gave.
	I briefly referred to the point that my noble friend Lord Forsyth raised in his question to the Minister. That is the nub of the problem and it is a question of seeing whether his answer deals with the problem adequately. It has been helpful to have this debate. We will study the Minister's words with great care. I am grateful to him for the sympathetic way in which he is approaching the problem. I beg leave to withdraw the amendment.

Amendment by leave withdrawn.
	Clause 4 [Guidance as to operation of public benefit requirement]:

Lord Phillips of Sudbury: moved Amendment No. 7:
	Page 3, line 40, at end insert—
	"( ) In carrying out consultation under subsection (4), the Commission shall, inter alia, consider the effect on public benefit of the charging policy of any charity."

Lord Phillips of Sudbury: My Lords, I hesitate to bring this amendment back again. I do so because I believe it is very important. I promise that, although I need to speak at some length on this, I shall curtail my contributions henceforward. But there are Members present today who were not present on 9 February or 28 June when we last discussed the amendment. It is therefore necessary to run through the reasons why I put the amendment forward and the justification for it. The noble Lord, Lord Best, and the noble Baroness, Lady Pitkeathley, added their names to the amendment previously, but, given the holiday we have so recently finished, it was not possible to organise their addition to it today, but they still support the amendment.
	The point is that public benefit reform is at the heart of the Bill. I suppose that one could say that with the charity tribunal it is the most important reform—one is the reform of law, public interest, and the other is a reform of mechanics, the tribunal. They are both hugely important. I have persisted with this amendment in the face of what I must call "government prevarication" because I think that it is essential to make good sense and good purpose of their own trumpeted reform; namely, that of public benefit. I would add, if it needs adding, that the National Council for Voluntary Organisations, as part of a consortium, has also persistently and to this moment supported a reform on the lines I am suggesting.
	If there is to be meaningful advance and change in relation to public benefit then we need something of this sort. The problem is that the existing common law in relation to public benefit is so confused and sparse. That was vividly demonstrated before the joint scrutiny committee when the Home Office differed markedly from the Charity Commission in what it thought the present law was. The chairman of our committee was fairly fierce about that and told them to go away and to get their acts together. They came up with a joint statement.
	That joint statement hung its hat, so to speak, on the case of Re: Resch. I hate to get into specific cases but I am afraid that public benefit under common law as it stands—as this Bill would be dependent upon—rests on the shoulders of that case of Re: Resch, which was a 1967 Privy Council case. Noble Lords will know that Privy Counsellors are made up of the House of Lords judicial bench. The case came to it from Australia and concerned a private hospital. I shall try briefly to demonstrate why the case of Re: Resch is, as I call it, a judicial blancmange and why the amendment is necessary.
	The sole judgment for the whole court was given by Lord Wilberforce. First, he said:
	"It would be a wrong conclusion . . . to state that a trust for the provision of medical facilities"—
	and it could be a trust for any charitable purpose—
	"would necessarily fail to be charitable merely because by reason of expense they could only be made use of by persons of some means".
	So that is quite clear. On that basis, a school which is very expensive and can be accessed only by people of some means is not by reason of that not to be charitable. He went on in another section to say:
	"The general benefit to the community [at large] of such facilities"—
	and that was a case, do not forget, of a private hospital run by nuns which was adjacent to a public hospital run by the same nuns—
	"results from the relief to the beds and the medical staff of the general hospital, the availability of a particular type of nursing and treatment which supplements that provided by the general hospital and the benefit to the standard of medical care in the general hospital which arises from the juxtaposition of the two institutions".
	So the general hospital was plainly charitable and the private hospital charged high fees next door. The judge was saying that the benefit to the community, the public benefit in this circumstance, was sufficiently present because the private hospital, as he put it, relieved beds and medical staff in the general hospital; that is, it took the pressure off. Secondly, he said that the interchange of staff was of benefit to both."
	Again, if one takes the case of an extremely antediluvian public school—one which has no interest in public benefit as we conceive it; no interest in extending its facilities to the state school system; no interest in sharing teachers, or anything else—it can say on the benefit of Re: Resch., "It is quite enough old boy, because we are taking pressure off the local comprehensive, saving you trouble". In the case of the antediluvian school, it cannot even say, as was said here, that there is of course the interchange of teachers between the two institutions, which is of benefit to both.
	The third excerpt that I will read is this. The judge said, "Another reason" for setting up the private hospital alongside the public one,
	"was that there were many persons who needed hospital nursing and attention who were not willing to enter a public hospital but were willing and desirous of having hospital accommodation with more privacy and comfort than would be possible in the general hospital."
	Again, that is what would be said of many public school parents. They are certainly not willing to send little Johnny to the local comprehensive, but by Jove they are ready to send them to the independent school where, to use the language of Lord Wilberforce, it would not be accommodation and facilities that were better, but it would be the facilities and class sizes.
	If we leave this Bill on the basis of the decision in Re: Resch. we are not implementing the Government's own stated intentions for this Bill and the intentions with which we, on this side of the House, firmly agree. In case noble Lords think that I am being partisan—I am sorry that the noble Lord, Lord Forsyth of Drumlean, has left the Chamber, because he made the point—I do not make this point in a partisan spirit at all. Indeed, I take the witnesses who came before the joint scrutiny committee at their word. We had evidence from the High Master of Manchester Grammar School and from Jonathan Shepherd, the general secretary of the Independent Schools Council. Both said, again and again and quite adamantly, that the independent school sector wishes to provide public benefit, is seeking to find ways of working with state schools, is making facilities available, and so on. Their thesis was that independent schools have changed, are changing and want to change and want to provide public benefit.
	I do not for a minute accept that this amendment is remotely partisan—it should be supported by the vast bulk of the independent schools which are of this mind and which want public benefit to be available to the public at large, beyond the small circle of their own paying pupils.
	I am content to rest my case on that basis. There is need for some bracing and some degree of certainty about what we mean in relation to public benefit. Somebody has said—I will not name names—that this amendment upsets the delicate balance. I would call what we have at the moment an indelicate fudge. If this Bill gets to the Commons without my very modest amendment in they will make mincemeat of it because there are gentlemen down the other end who are a great deal more partisan than I would ever dream of being. So I hope that this amendment will commend itself to the Government, even at this late stage, and to the House at large. I beg to move.

Lord Best: My Lords, I support the amendment. The link between the Bill's public benefit requirement and the charging policy of any charity is most notable in respect of fees charged by independent schools that are charities, as we debated earlier. The amendment tabled by the noble Lord, Lord Phillips, requires the Charity Commission to look closely at those cases. I believe that the outcome after consultation would be a more robust defence of the charitable status of those schools. In effect, the result of the Charity Commission addressing head-on this tricky issue would be that schools that charge fees—they are likely to be quite significant fees, affordable only by the relatively affluent—would be clear on the requirements that the public-benefit test would bring, and, having satisfied those, clear that their status as a charity was secure.
	I have made the point at earlier stages that independent schools that are charities are different—have different and extra responsibilities—from those run purely as commercial enterprises seeking to make profits for shareholders. By accepting those responsibilities, which will have been defined by the public benefit criteria, those schools will deserve the concessions, principally in relation to taxation, that society bestows on charities.
	There are now private companies promoting purely profit-making, fee-charging independent schools. The previous inspector of schools, Chris Woodhead, is promoting the Cognita company, for example, backed by a £475 million fund from venture capital investors. Such schools will take their fees and do not accept a responsibility toward the wider community—no bursaries for those from less affluent households, no support from specialist teachers for the comprehensive school down the road, no opening up of facilities for pupils of state schools, no underlying tradition and ethos of educational service to the educational community. There is a difference between an independent school that is there to make money for its backers and shareholders, and one that has charitable objectives and must recycle surpluses—profits, if you like—for charitable purposes.
	I strongly suspect that, when confronted with the phenomenon of private education, the public would much rather it were provided by charitable bodies, motivated by a philosophy of goodwill toward the wider community in which they exist, than by profit-making companies that turn their backs on the maintained sector and wish to operate in a way that polarises society between the rich and the rest.
	As Jonathan Shephard of the Independent Schools Council said:
	"There is the very serious point that charitable status underpins the social purpose of our schools and integrates them into society. There is a real risk that purely commercial schools will concentrate on fee-paying parents and ignore the local community".
	Charitable status, with the public benefit requirement, implies something special. The Charity Commission must consult on exactly what that will mean. I hope that there will be quite lengthy consultation, both about public benefit generally and about the specific sectors, which will lead to benchmarks that can be applied flexibly to each individual case. I guess that the commission would want to take a proportionate approach in looking at the size and resources of each charity, that it will not take a one-size-fits-all approach, and that there will therefore be no universal expectation of a set number or percentage of bursaries, for example. No doubt there will be some comparison of the fiscal benefits to the school with what that school gives back. Probably, if a school returns more than it receives, that is evidence that would tend to support the contention that it provides sufficient public benefit. But the commission needs to consult on all that.
	I can see a possible danger of overloading the requirements. If the requirement were to return substantially more than the fiscal benefits gained, that would negate the advantages of charitable status and give a competitive advantage to the commercial operators. That would be a logical nonsense and bad for society. The aim must be to ensure that the public benefit requirement is real. The noble Lord, Lord MacGregor of Pulham Market, suggested that some will fail the test, but we should not make that a large number of the schools in question. In other words, the Charity Commission will need to spell it out with a great deal of care. Those are the very issues that would be put into play in a consultation process of the kind that the amendment would require. It is an important ingredient and I support the amendment.

Baroness Warwick of Undercliffe: My Lords, I rise briefly to speak to the amendment, which would require the Charity Commission to,
	"consider the effect on public benefit of the charging policy of any charity",
	when consulting on guidance. That makes a lot of sense and I am sure that the Charity Commission will do so in the normal course of issuing guidance.
	However, I want to raise a point that I have made in earlier debates on the Bill in the previous Parliament. It relates to the university sector. I declare an interest as chief executive of Universities UK. It bears repeating that many universities are fee-charging charities, and it is clear that charging fees per se is not inimical to the principle of public benefit. Of course, the public benefit conferred by our universities is not narrowly related to the provision of tuition to students. In broadening research horizons, transferring the knowledge that they create, providing cultural and other facilities for the communities in which they are situated, they must all be considered to be providing public benefit. I hope that the universities' contribution to public benefit is not in any doubt.
	Universities are complex organisations that are unlike any other charity. I urge caution when considering the question before us. I hope that the Minister will acknowledge the complexities of the university world in relation to charitable status. If the Charity Commission is to consider fees policies when consulting on new and revised guidance, it must also take a steer from the Higher Education Funding Council as the principal regulator for the higher education sector, about the impact of any such guidance on universities. I hope that my noble friend will confirm that that will be the case.

Lord Borrie: My Lords, the point made by the noble Lord, Lord Best, is probably one that can be broadly accepted. A purely commercial profit-making organisation should not be regarded as charitable. I do not believe that the Charity Commission would regard such an organisation as charitable even with the Bill in its present state.
	The noble Lord, Lord Phillips, has gone further in emphasising the case of Re: Resch, which is part of the common law. The Bill accepts that common law as determining what is in the public interest, unless there is some definition that goes to the contrary. In analysing Lord Wilberforce's judgment, the noble Lord made the point, for example—I shall not quote all his points—that a fee-paying school is beneficial to the public because it enables the state sector to be relieved of the task of educating those who go to fee-paying schools. That is an unsatisfactory argument to carry forward from this Bill into the indefinite future. The noble Lord is right to say that the Bill in its present state will be regarded in another place as rather astonishing for 2005 and that one wants some more guidance.—I would say more statutory guidance.
	He has made an attempt to provide some by saying that in consultation the Charity Commission should have regard to the charging policy. Certainly, I do not disagree with that. The charging policy is important because it would indicate to what extent the fee-paying school is catering for a very tiny portion of the population rather than a larger portion, and whether the charges were sometimes reduced for certain numbers of students by bursaries, and so forth.
	But there are other factors that the Charity Commission or, indeed, the Bill ought to take into account, including the matters on which the noble Lord, Lord MacGregor, touched earlier; namely, the extent to which fee-paying schools provide some of their facilities to be available for others in the community and the state sector, including, of course, staff and laboratory facilities, and so forth.
	So, while I accord with what the noble Lord, Lord Phillips, has said in his argument, I am not sure that it goes far enough. However, if it would attract wide support here, it is better than nothing. It is better than the very limited way in which the Bill currently deals with public interest, which is to rely entirely on the Charity Commission and, above all, on existing common law, which, as the noble Lord has explained very clearly, is so inadequate.

Lord Hodgson of Astley Abbotts: My Lords, this amendment addresses an issue that we have already debated several times during the various stages of the two Bills brought forward during this and the previous Parliaments. Therefore, I briefly will restate the position of these Benches. Nothing that I have heard causes me to change my view. As I have said several times in the past as regards public benefit, the Government should be congratulated on managing to achieve a delicate balance—not a fudge but a delicate balance—reconciling the various issues and interests involved.
	As we have already said several times today, this Bill abolishes the old charitable presumption, so we create a level playing field in which all charities have to meet a public benefit test, no matter what their purposes are, and must do so on a continuing basis. We have ensured that the responsibility for that is passed to the Charity Commission under Clause 4(1). We have made the Charity Commission independent of the government in new subsection (1)(a). It may not be independent enough, but we will discuss that again when we come to Amendments Nos. 9 and 10. However, we have made a big step forward and the Government are to be congratulated on what they have done in taking us forward and increasing independence in that clause. In Clause 4(3), we require the Charity Commission to revise the public benefit objectives from time to time.
	I therefore have no problem with what the noble Lord, Lord Best, said—that there needs to be consultation and benchmarks. That seems entirely appropriate. But it is the Charity Commission which carries it out. I hesitate to tangle with the noble Lord, Lord Phillips, over Re: Resch., because if he finds it dense, as a non-lawyer he may realise that I find it even denser. This, as an historic case, will presumably be moved forward by the effluxion of time as the Charity Commission carries out those public benefit consultations.
	Having set the Charity Commission the task of revising public benefit from time to time, we should surely now leave the commission to get on with its new responsibilities. Surely, it is inappropriate that having set the Charity Commission free—I think that we all agree on how important that independence is—it is ridiculous immediately to turn around and restrict that freedom by the sort of amendment that the noble Lord puts forward.

Lord Phillips of Sudbury: My Lords, I am most grateful to the noble Lord for giving way. Is he aware that the Charity Commission would like this amendment?

Lord Hodgson of Astley Abbotts: My Lords, I am not aware of whether the Charity Commission wish to have this amendment. But I am saying that I do not think that it should have it; I think that it should be operating. Its responsibility is to interpret the public benefit test on a level playing field which this Bill currently provides. I do not think that tilting the playing field to pick out one particular aspect is the right way forward. The Government have got it right. They should stick with it. I hope that they will continue to reject the amendment.

Lord Bassam of Brighton: My Lords, in Committee on 28 June, I undertook to study and to reflect very carefully on the contributions made by many noble Lords to the debate on that occasion and at previous stages. We have debated this on several occasions. Although we approached this in a fairly rigorous and open-minded way, our views remain the same as ever. That may be of some comfort to the noble Lord, Lord Hodgson. I want to go over our thinking on this because it is right for me to put it on the record. It is a matter of central importance to the Bill.
	The Charity Commission will be required to consult on and to issue guidance on the operation of the public benefit requirement. The requirement is that a purpose falling within the list of purposes in Clause 2(2) must be for the public benefit if it is to qualify as a charitable purpose. We all understand that; we have had that discussion on many occasions.
	It will, as now, be for the commission to apply the public benefit requirement in determining whether a particular organisation is a charity. There is, rightly, a great deal of interest in the commission's proposed approach to its task of judging public benefit, and in the legal basis of the public benefit requirement. The commission has issued a publication, called Public Benefit—the Charity Commission's Approach, to illustrate how it would be likely to approach the task of ensuring that charities meet the public benefit requirement. That publication also describes the legal basis for the commission's task.
	The adequacy of the legal basis is very important, as it will enable the commission to carry out credible and effective checks on the public benefit of charities. We remain confident of the adequacy of that legal basis. The commission is clear in its publication that it will apply the general overarching principles derived from the legal basis to carry out public benefit checks. Those checks will be applicable both to new organisations applying to register as charities and to charities that already exist, and which may have been on the register since it started in 1960.
	The commission says that it will be able to carry out public benefit checks under the Bill as drafted. If the commission carries out a check that exposes an apparent lack of public benefit in a charity, one of two consequences could follow. First, if the charity is not delivering public benefit but is able to, the commission's action might include helping the charity to change its stated purposes or its activities so that in future it is benefiting enough of the public to meet the public benefit requirement. The commission might also use its regulatory powers to enforce change if the trustees are failing to co-operate in introducing change themselves. The commission does not expect to have to resort to such action in more than a few cases.
	Secondly, in cases—these are likely to be pretty rare—where the trustees are co-operating with the commission but the charity simply cannot in all the circumstances provide public benefit, the commission's action might include removing the charity from the register and making a legal scheme. The scheme would ensure that any charitable assets of the organisation were in the future applied for other charitable purposes close to any purposes that have ceased to be charitable—something we discussed earlier. That would happen only where it was not possible for an organisation to meet the public benefit requirement. I emphasise that the new purposes would be close to the original ones so that, for example, the assets of a charity whose original purposes were educational would be applied for new purposes which were educational. Those two sets of consequences will follow both in the case of fee-charging charities and in the case of charities that do not charge fees.
	The noble Lord, Lord Phillips, has described his amendment in the past—he has repeated this today—as a modest one and, in the best sense of the word, I agree. It is modest to the extent that we do not believe it would change anything. That is because, in setting out the legal principles by which it will apply the public benefit requirement, the Charity Commission says that it can already, and without the need for the amendment, take into account the effect of fee-charging on an organisation's ability to meet the public benefit requirement. Our reflection over the summer has confirmed us in our belief that Part I as drafted will give charity law a proper foundation for many years in the future. It will also allow the commission to discriminate effectively in practice between organisations that provide a true public benefit and those that do not.
	In conclusion, I am drawn to the comments made by the noble Lord, Lord Hodgson. We have struck a balance. It has been arrived at through careful consideration of the issues. There has been consultation. The Charity Commission itself has undertaken very careful assessment and consultation with stakeholders in the past. The position that we have reached is reasonable and fair. The point raised by the amendment may already be taken into account by the commission if it believes it to be relevant, which no doubt it will.

Lord Wedderburn of Charlton: My Lords, will my noble friend say a brief word about the policy of the Government in this area? Certain approvals by the Minister are required for staff appointed by the commission—for example, their terms and conditions of employment. Do the Government envisage that they will encourage the commission to appoint sufficient research staff to undertake the enquiries and consultations needed in this very difficult area?

Lord Bassam of Brighton: My Lords, I am reluctant to respond to my noble friend because of the conventions of the House.
	It is not for the Government to interfere in the employment policies and practices of the commission—it is an independent body. Noble Lords have said on a number of occasions that they greatly value that independence. The noble Lord, Lord Hodgson, has argued that we should go further and the noble Lord, Lord Phillips, has agreed with him in the past. If the commission feels that it is right to review its staffing arrangements to meet the requirements of exercising more broadly the public benefit test, no doubt it will be for the commission to make that qualification and determination.
	I would like to respond to the point made by the noble Baroness, Lady Warwick. She asked if the commission would be consulting with the Higher Education Funding Council on the public benefit test for universities. The answer is an unequivocal yes, of course it will.

Lord Phillips of Sudbury: My Lords, I am grateful to all noble Lords who contributed to this mini-debate and particularly to the noble Lords, Lord Best and Lord Borrie, and the noble Baroness, Lady Warwick, for supporting the amendment.
	If the Minister thinks that the Bill strikes a balance on this central and important issue, I would not like to depend upon it. There are difficult conventions about the role and view of the Charity Commission which I do not wish to transgress. But I reassert what I said when I intervened a few moments ago: the Charity Commission would wish for the amendment for the reasons that I endeavoured to explain which have their basis in the common law and the case of Re: Resch. It was notable that the Minister—although he said much—said absolutely nothing about those key arguments that are not novel, but ones I have addressed to the House on two previous occasions. I suggest that the reason he did not address them was that what I said is incontrovertible. It is not only my view but that of distinguished charity lawyers and academics.
	It is the job of this House to legislate in a manner which is "seaworthy"—which will achieve on the ground that which we want it to achieve and which will give support to those who have to implement it. This central issue in the Bill is not seaworthy. There is no partisanship in the amendment. It follows the best practice which is already the norm in the independent school sector. I wish to test the opinion of the House.

On Question, Whether the said amendment (No. 7) shall be agreed to?
	Their Lordships divided: Contents, 60; Not-Contents, 139

Resolved in the negative, and amendment disagreed to accordingly.
	Clause 5 [Special provisions about recreational charities, sports clubs, etc.]:

Lord Phillips of Sudbury: moved Amendment No. 8:
	Page 4, line 24, at end insert "unless and until it registers as such, in which event it shall cease automatically to be a registered sports club"

Lord Phillips of Sudbury: My Lords, the amendment seeks to make life easy for a registered sports club that wishes to convert to a charity. The addition of the words in Amendment No. 8 would allow that to happen in the simplest and most direct way and simply provides that a registered sports club remains a registered sports club unless and until it registers as a charity,
	"in which event it shall cease automatically to be a registered sports club".
	That sounds a little arcane, but registered sports clubs are a relatively new class of quasi charity. They have all the benefits of a charity except one particular tax advantage, but they are not charities. That is important in terms of them not coming under the purview of the Charity Commission, which is the point of subsection (4).
	A small number of registered sports clubs want to become charities and this is the simplest way of allowing that; it makes everything automatic. Although in Committee the Minister said that there could be tax disadvantages, there would be no tax disadvantages in a registered sports club becoming a charity. Any deemed transfer of its assets to the charity would attract no capital gains tax or other taxes. I beg to move.

Lord Bassam of Brighton: My Lords, I am grateful again to the noble Lord, Lord Phillips, for his careful explanation. In Committee we agreed to consider the amendment, as we have some sympathy with its thrust, which aims to simplify transition from a CASC to charity.
	As it is drafted the Bill provides for an existing or new amateur sports club to choose between either CASC or charitable status. The process is not automatic, but it is fairly straightforward. In the event that a CASC wanted to convert to a charity—which is considered to be unlikely—the CASC would create a new club in charitable form, pass all the CASC's assets to it and then wind up the CASC. It would also be straightforward for a charitable club to convert to CASC status, since registration as a CASC would have the effect of the club ceasing to be treated as a charity, as Clause 5(4) provides that any club that has charitable purposes and is registered as a CASC is not a charity. Although the charity would trigger a deemed disposal of its assets when it ceased to be a charity, relief would be granted under the CASC legislation.
	The CASC to charity transition would be smoother with this amendment, but it would create difficulties for a charitable amateur sports club that wished to become a CASC. Under the amendment a club registered with the Charity Commission cannot be a CASC. So in order for a charity to become one it would need to cease to be a registered charity first. On ceasing to be a charity there would be a deemed disposal of the assets. Any gain arising would not be sheltered by charitable tax reliefs, or the tax reliefs available to CASCs.
	I hope that the noble Lord, Lord Phillips, will accept that while we support the intention behind his amendment it would create practical difficulties for a charity that seeks to become a CASC. As there is already a mechanism for an amateur sports club to convert from CASC to charity status, I invite the noble Lord to withdraw his amendment.

Lord Phillips of Sudbury: My Lords, I am grateful to the noble Lord for his response to my amendment. I did not agree with a passage at the end of it, because my amendment is not about converting from a charity to a CASC, as he calls it, but the reverse. I shall read what he says and, if I still think he is wrong, we shall have to deal with the matter at Third Reading. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Boston of Faversham: My Lords, in calling Amendment No. 9, I have to tell your Lordships that if it is agreed to I cannot call Amendment No. 10.

Schedule 1 [The Charity Commission]:

Lord Hodgson of Astley Abbotts: moved Amendment No. 9:
	Page 77, leave out lines 41 and 42.

Lord Hodgson of Astley Abbotts: My Lords, with this amendment we return to a familiar topic that we presaged a few moments ago in the debate on the amendment of the noble Lord, Lord Phillips; that is, the independence of the Charity Commission. In moving this amendment I do not wish to appear to be looking a gift horse in the mouth, so I wish to place firmly on record my appreciation for the changes that the Government have already made on this issue, in particular the insertion of the new subsection (4) in new Section 1A (in Clause 6), which reads:
	"In the exercise of its functions the Commission shall not be subject to the direction or control of any Minister of the Crown or other government department".
	However, notwithstanding that, the provisions of paragraph 5 of Schedule 1 on page 77 continue to give me cause for concern, in particular subparagraph (3) which reads:
	"The appointment of other staff requires the approval of that Minister as to their terms and conditions of service".
	It does not take a genius to work out that a future government of whatever political colour could use this measure to shape the staffing of the commission, and thus influence the commission's attitude and approach on key charitable and perhaps political issues.
	When we debated this matter previously in Committee on 28 June the Minister said,
	"Senior Civil Service pay and grade structures are determined by the Cabinet Office, but departments including the Charity Commission have flexibility to make their own arrangements for determining individuals' pay by reference to performance. Therefore, except for a small number of its most senior staff, the Charity Commission already effectively has control over the terms and conditions of service of staff within it . . . The commission has discretion in how its total pay budget is divided up. It also agrees its arrangements annually with the Treasury to ensure that they are broadly in line with other departments. Paragraph 5(2) and (3) of Schedule 1 does not mean that the Minister for the Civil Service or officials at the Cabinet Office acting on his behalf have to approve the detailed terms and conditions of service of either the chief executive or Charity Commission staff in general. In practice, for the Charity Commission as for other departments, they approve only the broad framework within which detailed decisions on terms and conditions are taken by departments themselves".—[Official Report, 28/6/05; col. 174.]
	Those words are all very fine although the use of the qualifications "effectively" and "in practice" leave me with a slight concern. However, the Bill as presently drafted simply does not tally with what the Minister says. It states:
	"The appointment of other staff requires the approval of that Minister as to their terms and conditions of service".
	In my previous amendments on this topic which we discussed in Committee on 28 June, I sought to leave out the whole of paragraph 5—the "staff" paragraph of Schedule 1. I accept that that was too blunt an instrument. Therefore, today I ask the Government to accept this amendment, which tackles only the pay and rations of staff other than the chief executive—the latter's terms of service will still require direct approval as provided for in the Bill as presently drafted.
	I note that the noble Lord, Lord Phillips, has a perhaps more silkily phrased amendment addressing this point, which was no doubt drawn up as a result of his legal experience. I should be happy to support that but I am convinced that unless we amend paragraph 5 of Schedule 1 along the lines that both the noble Lord, Lord Phillips, and I have in mind, we run the risk of fatally compromising the independence of the Charity Commission—something which I believe no one in this House wishes to see happen. I beg to move.

Lord Phillips of Sudbury: My Lords, Amendment No. 10 is grouped with the amendment just moved with irresistibility by the noble Lord, Lord Hodgson. We are in a real "Yes, Minister" situation—one of something approaching gobbledegook. I may be a lawyer, but I really do jib at a Minister of the Crown saying, during the last consideration of this,
	"Paragraph 5 . . . (3) of Schedule 1 does not mean that the Minister for the Civil Service or officials at the Cabinet Office acting on his behalf have to approve the detailed terms and conditions of service of either the chief executive or Charity Commission staff in general".—[Official Report, 28/6/05; col. 174.]
	Paragraph 5(3) says that:
	"The appointment of other staff"—
	that is to say, staff other than the chief executive—
	"requires the approval of that Minister as to their terms and conditions of service".
	I would not for a second accuse the Minister of seeking to mislead the House, but he inadvertently misled the House. If his answer is, "Don't worry, old chap. We don't actually look at the terms and conditions of service of other members of staff", that is not good enough. My amendment, which the noble Lord, Lord Hodgson, called a little silkier, seeks to be a little more accommodating by stating that the appointment,
	"and retention of other staff must as regards remuneration be within the total remuneration budget agreed annually with the Treasury".
	I lifted that from what the Minister said when we discussed this on 28 June.

Lord Swinfen: My Lords, I would briefly like to support the amendment moved by my noble friend Lord Hodgson of Astley Abbots. Lines 41 and 42 of page 77 bring a non-governmental body directly under the political control of the government of the day. That is wrong and I strongly support what my noble friend said.

Lord Mackay of Clashfern: My Lords, I want to say a word about the Minister's response on the last occasion. Either it means that the Minister for the Civil Service is not going to implement what this Bill proposes, if it is passed in its present form, or it means that the words of the proposed statute have no meaning at all. It says in plain terms that it,
	"requires the approval of that Minister as to their terms and conditions of service",
	so all the terms and conditions of service must be approved by the Minister for the Civil Service. If words mean anything, that is what these words mean. The Minister's explanation is as clearly inconsistent with that as can be demonstrated. Therefore either this should be amended, or the Minister is telling us that the Government in future intend to ignore the terms of their own legislation.

Lord Bassam of Brighton: My Lords, we have had some healthy debates about the independence of the Charity Commission. As was made clear a few minutes ago, we had debate on that very provision in Committee, but our thinking has not changed. The Bill preserves the Charity Commission's status as a non-ministerial government department, and this provision flows from that.
	The Charity Commission already has delegated authority on behalf of the Minister for the Civil Service to determine the number and grading of posts—with the exception of senior civil servants—and the terms and conditions of employment. That is in so far as they relate to the classification of staff—with the exception of those in the senior Civil Service—and remuneration, with the same exception, although here there is very broad scope for discretion. It also relates to allowances, expenses, holidays, hours of work and attendance, part-time and other working arrangements, performance, promotions, retirement age—again, with the exception of the senior Civil Service—redundancy, and the re-deployment of staff within the Home Civil Service.
	All those things are delegated in terms of authority to the Charity Commission. The commission, along with other non-ministerial government departments, has already delegated authority to determine the terms and conditions of its staff without referral to the Minister. That means that the commission is required only to agree the overall pay remit with the Treasury and to employ the right mix of staff to deliver its objectives. As with other departments, the commission would require approval of the broad framework within which it can take detailed decisions on terms and conditions of service. It is a broad approval. That has worked extremely well, and the commission has made good use of that significant flexibility and independence to recruit and retain good-quality staff.
	Paragraph 5(3) of Schedule 1 brings members of staff of the commission within the Home Civil Service. It is a common provision in other legislation that establishes non-ministerial government departments, and works well with, for example, the Commissioners for Revenue and Customs Act 2005, the Food Standards Act 1999 or the Land Registration Act 2002. They all do the same for their staff.
	The amendment would require the staff of the commission to be reclassified outside the Home Civil Service. That is the effect of the amendments in this group. I ask noble Lords opposite to think about that extremely carefully. That would create problems with such staff transferring to and from other departments, and it could affect their career options. It could also seriously affect the pension position of staff. The Government have decided that the most appropriate status for the commission remains that of a non-ministerial department—not least because no suitable alternative had been identified from other quarters. It works well for the Revenue, and in food standards and land registration.
	However, as I said in Committee, Clause 70 gives us the opportunity for the commission's status to be considered as part of a review of the impact of the legislation. I made that clear the last time we debated this. A person must be appointed to carry out the review within five years of the Bill receiving Royal Assent, and a copy of the report produced as a result of the review must be laid before Parliament. It may well be that as a result of that review some alternative status for the Charity Commission can be identified. We remain of the view that, for as long as it remains a non-ministerial department staffed by civil servants, it is essential that the Government retain some broad control of staff terms and conditions of service. That is exactly what I set out earlier in my explanation.
	If noble Lords opposite are tempted to press the amendment, they need to take careful cognisance of what I said, particularly about the impact on staff and their classification and career opportunities. They also need to take careful account of the impact that it would have more broadly. This is a dangerous amendment; we cannot support it. I urge noble Lords who are tempted to support it to rethink their position.
	I ask this important question—have noble Lords who are considering pressing the amendment given any thought at all to consulting with those it might affect? If they did, they would find that those staff might find it increasingly difficult to live with. It is not the purpose for which they entered their current employment. To be transferred in a way that the amendment might suggest could have very serious consequences indeed.

Lord Hodgson of Astley Abbotts: My Lords, I am grateful to the Minister. As ever, he put his case forcefully. I am grateful to my noble friend Lord Swinfen for his support, and in particular to my noble and learned friend Lord Mackay of Clashfern. He put his finger on it directly. The Minister talks about a broad approach and broad control, but paragraph 5(3) of Schedule 1 is not about broad approach and broad control. It is about specific approach and specific control. It is about other staff requiring,
	"the approval of that Minister as to their terms and conditions of service".
	I do not accept that that is the proper argument or an argument with foundation.
	The Minister also raised the question of pensions, and we have been around that track before. One of our early amendments, with which the Government were equally unhappy, dealt with pensions. The Government were not happy about that then, and certainly that provision could easily be reinserted to address the pension issue. We should not allow the pension position to drag us away from the central issue this afternoon, which is that we want to see the Charity Commission properly independent. The Minister accepts that this is important—we were agreeing on it in the earlier amendment—but he has not provided us with an adequate answer.
	I understand that my amendment is too direct. What the noble Lord, Lord Phillips, has tabled is considerably more silky, and attacks the one remaining plank in the Minister's argument. I will therefore withdraw my amendment, but I hope the noble Lord will have a more robust approach. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Phillips of Sudbury: moved Amendment No. 10:
	Page 77, line 41, leave out from "appointment" to end of line 42 and insert "and retention of other staff must as regards remuneration be within the total remuneration budget agreed annually with the Treasury"

Lord Phillips of Sudbury: My Lords, I thank the Minister. The key to what he said was that the state of affairs both these amendments want to bring about— the independence of the Charity Commission with regard to terms and conditions of staff below commissioner and very senior level—is, at the moment, by grace and favour of a delegation made by the Minister. That delegation could be withdrawn at any time. The Minister may pucker his handsome face, but that will not do, because things change. Ministers change, policies changes, and the relationship between the Minister and the commission may get extremely raggedy in the future.
	The Minister made a serious point, with a degree of tentativeness, about what this would do to the status of the employees. I am sure I speak for the noble Lord, Lord Hodgson, as well as myself in saying that, if that is the case, we would accept without demur an amendment at the final stage of this Bill that made it clear that the status of employees was unchanged by this amendment. That could easily be done. I beg to move.

Lord Bassam of Brighton: My Lords, I am loath to get up, but the amendment covers more than just the pension issue. I thought the noble Lord, Lord Hodgson, was rather skirting around the broader issue. We have accepted in earlier debates that we have established a great measure of independence here, and it is wrong of the noble Lord, Lord Phillips, to suggest that this is by grace and favour of a Minister. It is established practice, not just with the Charity Commission, but with the other non-ministerial government bodies. This is a tried and tested mode of operation. The noble Lord seeks to upset that and a lot more, relating to staff terms and conditions, pensions and so on. Before taking that step, he should retreat and think seriously about what he is achieving here.

Lord Mackay of Clashfern: My Lords, is there any reason of which the Minister can think why the position as he describes it should not be put in clear terms in the Bill?

Lord Bassam of Brighton: My Lords, there is a good reason when one considers the material impact of what these amendments would achieve. There has been no opportunity for any discussion outside your Lordships' House about what this would mean and imply for those currently employed within the Home Civil Service, and no doubt they will have powerful views to be expressed on those subjects. We need to know and understand how they might feel about that.

Lord Phillips of Sudbury: With respect, my Lords, I do not think the Minister answered the question of the noble and learned Lord, Lord Mackay of Clashfern. He asked why the status quo, under the delegation described by the Minister, could not be put in the Bill. If there is retention in the hands of the Minister of the power to revoke that delegation, as there is, it is all very well saying that it is present custom and practice; those can change at the decision of the Minister. That is what we are not willing to see in the Bill.
	If the Minister is saying that we should have consulted on this arcane issue before, it would have been helpful had he given us some warning of it. He knows how strongly we feel, because this is not a new amendment. I put back to him the fact that, if my amendment would change the status of the employees of the Charity Commission to their disadvantage, it is a straightforward matter for the Minister to bring back an amendment at Third Reading to say, quite simply, that their status is unchanged by this amendment. On the basis of past debates on this issue and debate today, I believe that the issue should be put to the House for determination.

On Question, Whether the said amendment (No. 10) shall be agreed to?
	Their Lordships divided: Contents, 166; Not-Contents, 134

Resolved in the affirmative, and amendment agreed to accordingly.
	Schedule 2 [Establishment of the Charity Commission: supplementary]:

Lord Bassam of Brighton: moved Amendment No. 11:
	Page 81, line 8, leave out "for England and Wales"

Lord Bassam of Brighton: My Lords, this is a minor tidying-up amendment which has been recommended by the draftsman. I could give further explanation, but I hope that that will not be necessary. If noble Lords want to question me on it, of course they are entitled to. I beg to move.

Lord Craig of Radley: My Lords, perhaps the Minister will explain why Clause 6 contains so many references to the Charity Commission for England and Wales, yet we are removing it from this schedule.

Lord Bassam of Brighton: My Lords, it is merely a tidying-up issue. It is for simplicity and ease of understanding.

On Question, amendment agreed to.

Lord Bassam of Brighton: moved Amendment No. 12:
	Page 82, line 18, at end insert—
	:TITLE3:"Resource accounts of Commission
	(1) The new Commission and the old Commission shall be treated as being the same government department for the purposes of section 5 of the Government Resources and Accounts Act 2000 (c. 20).
	(2) Resource accounts sent to the Comptroller and Auditor General by the new Commission in respect of any period before commencement shall be resource accounts in the name of the new Commission.
	(3) In this paragraph—
	"the new Commission" means the Charity Commission established by section 6, and
	"the old Commission" means the government department known as the Charity Commission and existing immediately before commencement."

Lord Bassam of Brighton: My Lords, the Bill abolishes the office of the Charity Commissioners—an unincorporated body—and establishes a corporate body, the Charity Commission. The Charity Commissioners would be regarded as a different government department from the Charity Commission, although in practice what would have taken place is essentially a change of form of a single department. This amendment will enable the commission to prepare a single set of accounts for the financial year in which the Charity Commission is established. I beg to move.

On Question, amendment agreed to.
	Clause 7 [The Commission's objectives, general functions and duties]:

Lord Swinfen: moved Amendment No. 13:
	Page 7, line 20, after "its" insert "regulatory"

Lord Swinfen: My Lords, in moving Amendment No. 13 I shall speak also to Amendment Nos. 14 and 15. The purpose of these amendments is to require the commission to act fairly and reasonably, as well as in accordance with the best principles of regulatory practice, by placing a specific statutory duty upon the commission so to act, in order to provide clarity in charity law for the benefit of charity people, the charity appeal tribunal and the courts.
	The requirement for the insertion of,
	"and shall be fair and reasonable",
	on page 7, line 25, had much support in previous stages of the Bill in the House, and follows the recommendation of the joint parliamentary committee reporting on the draft Bill last year. Many noble Lords, like me, believe these words need to be placed on the face of the Bill because the commission has not always behaved in that way. I have given numerous examples of these in past stages of the Bill, which I hope it is not necessary to repeat.
	The Minister's objection to the insertion of these words appears to be that administrative law already requires all government bodies to behave fairly and reasonably. But, in the Little Gidding Trust case, the high court specifically refused to consider whether the commission had behaved fairly and reasonably in making orders that were the subject of trustee appeals brought on grounds that the commission had not acted fairly and reasonably, but with bias, in the making of these orders. They are now case law and so will be followed in future cases.
	Had there been a statutory duty on the commission to exercise its powers fairly and reasonably the courts would have been compelled to have full regard to such duty. This ruling now forms part of charity case law and is therefore of the greatest importance. I believe that, so far as charity law is concerned, the phrase "fair and reasonable" should appear on the Bill. The charity sector is founded on a bedrock of decency and morality, and surely has reason to expect a standard of regulation enshrined in statute, which places a specific requirement upon the commission, as regulator, to act fairly and reasonably.
	In Committee, the noble Lord, Lord Dahrendorf, said:
	"If there is the slightest reason to believe that charities would be encouraged by including the words 'fair and reasonable' in the Bill, it is a good enough reason to do so. I therefore hope that it is still possible to include these words".—[Official Report, 28/6/05; col. GC 187.]
	I am grateful to him for those words on that occasion; I hope that he will repeat them this evening. I beg to move.

Lord Hodgson of Astley Abbotts: My Lords, I support my noble friend's amendments in part. Amendment No. 14 with the proposal to leave out the words "so far as relevant" in new Section 1D(2)4 of Clause 7 seems appropriate. These words—I describe them as weasel words—seem unnecessary and provide an opportunity for people to avoid the principles laid out in that new section, so I have a great deal of sympathy with my noble friend's amendment.
	The issue of Amendment No. 13 in inserting the word "regulatory" in the first line of new Section 1D(2)4 before the word "functions" seems less strong as the commission ought to have regard to the principles of best practice in all its functions, not just the regulatory ones. There are a number of functions it carries out, in particular the provision of advice, which it ought to consider, and in the light of the provisions of new Section 1D(2)4. So I am less happy about that.
	As regards Amendment No. 15, I was interested to hear my noble friend's comments that the court was not able to take into account the fairness and reasonableness of the actions of the commission and that he believes that inserting these words would strengthen the position vis-à-vis the court. It originally occurred to me that maybe this was redundant given the pretty extensive provisions of new Section 1D(2)4, which contains the phrase:
	"proportionate, accountable, consistent, transparent and targeted".
	Therefore the addition of the words "fair and reasonable" was maybe superfluous. However, I feel that Amendment No. 14 has a great deal to commend it and I am pleased to support it.

Lord Dahrendorf: My Lords, it is almost embarrassing to rise again in defence of two little words. I say "almost embarrassing"; I would find it truly embarrassing if I had to rise and attack these two little words, or not accept them, in the Bill. Fortunately that is not my position. I shall speak only to Amendment No. 15.
	My position is that I find it perfectly possible to accept the Government's arguments as set out in a letter which the Minister sent to me and others on 11 July 2005, and yet believe that it would make sense to include the words "fair and reasonable", because I ask myself one simple question: whose perception matters most in this regard? In my view what matters most is the perception of charities and their trustees and supporters, and notably of smaller charities. If they feel—and they do feel—that it would help them to have the support of the law by the inclusion of the words "fair and reasonable" then I cannot see any overriding argument not to do so. I would regret it very much if we did not manage or make it possible at this late hour—late not in terms of the day today, but in terms of the debate of this legislation—to make this step towards the understandable perceptions of especially smaller charities. I support the amendment.

Baroness Howe of Idlicote: My Lords, I rise also fairly briefly to support the amendment of the noble Lord, Lord Swinfen. I did so on at least two other occasions, I think, when this Bill was previously before us, and I failed to understand the reason why "fair and reasonable" could not have been added earlier. There are real concerns which have been enumerated on many occasions by the Association for Charities about some of their members and the way they were dealt with. The amendment would be in everybody's interest.
	We have just agreed to Amendment No. 10 which assures greater independence for charities, which is absolutely fair. We want greater independence; we want to stress that they are independent, but with independence comes perhaps a greater degree of accountability as well. We know that the NCVO also supports this amendment. It would be perfectly fair now for the Minister to agree that the words "fair and reasonable" be added.

Lord Phillips of Sudbury: My Lords, I would like to add a few words. The noble Baroness, Lady Scotland of Asthal, said—I think on 28 June last, at col. 189—that, perfectly reasonably, the Government had made all sorts of amendments and improvements to the Bill, which is true, and she drew attention—which is quite fair—to the addition of the words,
	"proportionate, accountable, consistent, transparent and targeted",
	and then said that she did not think that adding "fair and reasonable" was necessary. One point that seems to be different is that made by the noble Lord, Lord Dahrendorf—and indeed by myself last time—that one does not want to be too legalistic when looking at the adjectives which have already been added to a very important clause. One thinks of the vast number of non-lawyers in the voluntary sector who will from time to time have cause to try to understand this Bill. "Fair and reasonable" is a time-honoured phrase that has a resonance in a way that some of these others do not. I should be comforted if in answering the debate the Minister could give an absolute assertion that the words "fair and reasonable" add nothing whatever to the words "proportionate, accountable, consistent, transparent and targeted"; and, secondly, that in the context in which the noble Lord, Lord Swinfen, wants them inserted, which is in the commission's regulatory duties—because new Section 1D(2)(4) refers to the principles of best regulatory practice—he is quite sure that the need for those words and for the words "fair and reasonable" does not crop up in any of the five other general duties of the commission; for example, in the fifth general duty, which is not that of regulation or performing its functions as regulator but managing its affairs, and so on.
	If the Minister could give an absolute assertion that the words are literally redundant in all circumstances that would at least be in Hansard on the record, although I still think, for reasons mentioned previously, that there is no reason on earth why the Government should not agree to these additions, given the nature of the voluntary sector.

Lord Bassam of Brighton: My Lords, I shall take the amendments in sequence. I shall start with Amendments Nos. 13 and 14 and then spend a little more time on Amendment No. 15. I think that the noble Lord and I seek to achieve the same end with Amendments Nos. 13 and 14. We have, as has been said, debated the second of the amendments previously. The noble Lord, Lord Phillips, reminded me that it was my noble friend Lady Scotland who dealt with this matter on an earlier occasion.
	Both we and the noble Lord, Lord Swinfen, want to ensure that the commission must has regard to the principles of best regulatory practice when regulating. There can be no difference between us on that. It would not make sense for the commission to have regard to these principles when performing functions which are not regulatory; for example, when it lays its annual report before Parliament.
	I can see the argument that the inclusion of the words "so far as relevant" means that it must be determined when it is relevant and when it is not relevant to have regard to the principles of best regulatory practice, but it is clear that the occasion on which the commission must have regard to best regulatory practice is when it is performing regulatory functions. I do not see how it could be argued that there could be a situation involving regulation where the commission should not have regard to the principles of best regulatory practice.
	The draftsman has achieved our aim by stating that,
	"the Commission must, so far as relevant, have regard to the principles of best regulatory practice",
	when performing its functions. We are clear that this qualifier means that the commission must have regard to these principles when performing regulatory functions and must not have regard to these principles when performing non-regulatory functions. The example I gave was that of laying an annual report before Parliament.
	I argue that the noble Lord, Lord Swinfen, seeks to achieve the same end simply through different drafting. We have been guided by the expertise of parliamentary counsel when considering drafting. I think that he has produced drafting which achieves our overall aim and purposes. Sometimes noble Lords are critical of parliamentary counsel and draftsmen—and I can understand why that might be the case. But I think that on this occasion they have carefully weaved their way around a little difficulty. So I do not think that it is necessary therefore to accept the noble Lord's amendment. But I hope that I have reassured him sufficiently to enable him to withdraw it.
	I turn to Amendment No. 15. We have now debated the amendment on four occasions. The Government's view was most recently set out on 28 June by my noble friend Lady Scotland. I reaffirm that we agree that the commission should act fairly and reasonably. There is no difference between us on that. We were sufficiently persuaded by Members of your Lordships' House to include a duty on the commission to have regard to the principles of best regulatory practice when performing its functions, so far as relevant; and, we have spelt these principles out in the Bill. The noble Lord, Lord Phillips, has referred to them. Regulatory activity should be proportionate, accountable, consistent, transparent and targeted only at cases in which action is needed.
	We have chosen those specific words because they are the principles which the Better Regulation Task Force chose as the principles of best regulatory practice after very careful thought and careful work. We feel that these words adequately express the concept of fairness and demonstrate clearly to trustees and others the way in which they can expect the commission to act.
	The noble Lord, Lord Phillips, invites me to give an absolute assurance. I give an absolute assurance that they add nothing to the legal duties which the commission is already under. We have no doubt that the commission is under a duty in administrative law to use its powers reasonably. In our debates I think that there has been a consensus that that is the case.
	We have also said that if Parliament thought it necessary to give the Charity Commission that duty, the implication would be that the commission did not have that duty at present. That could present us with some difficulties. That is not the case. If the noble Lord feels that the addition of those words would press the commission to consider this existing duty more profoundly, then I fear that he may well be mistaken. In fact, I go further and say that he is mistaken.
	The commission does not doubt that it has this duty already. It would not change its behaviour as a result of the addition of these words, and so the amendment would have no practical effect. Although I think that there is a lot of common ground between us—I have explained how I see that common ground—I think there are good reasons why the amendment is not necessary. And there are positive reasons, which I have just outlined, why it would be undesirable. For those reasons, although I am sympathetic and understand the case which has been very carefully made by the noble Lord, Lord Swinfen, and supported in your Lordships' House this afternoon, I cannot accept Amendment No. 15.
	I have addressed this issue very carefully. I have tried to be as helpful as I can in dealing with all three amendments. I hope that my explanation has provided some useful clarity.
	The noble Lord, Lord Swinfen, raised the issue of the Little Gidding Trust case and the failure of the judge to consider fair and reasonable conduct so far as the commission was concerned in making the order removing trustees. The advice I have been given is that the judge took this approach to shorten the hearing and that he reconsidered whether the order the commission made should stand. The judge decided that it should as it was made in the best interests of the charity. He did not feel that it was necessary in those circumstances to consider the commission's conduct. I can make no other comment on that case. I hope that that point of explanation assists the noble Lord, and I hope that noble Lords have listened very carefully to the explanation that I have given this evening.

Lord Swinfen: My Lords, I thank all noble Lords who have spoken in this short debate. I understand what my noble friend Lord Hodgson of Astley Abbotts and the noble Lord, Lord Bassam of Brighton, have said about Amendment No. 13. Therefore, I will not move Amendment No. 13.
	I have not been persuaded on my Amendments Nos. 14 and 15, in particular on Amendment No. 15—fair and reasonable. I understand that that amendment is supported by the NCVO and that it has written to a number of your Lordships on the subject. I am not aware that I have ever received a copy of the letter myself; perhaps it is still in the post.
	Since I spoke on this subject at Second Reading, I have heard from a charity that I think has not had fair and reasonable treatment by the Charity Commission. It may well be a case of one bad apple in a barrel. But, that being the case, these words in the Bill would be able to allow the commissioners to persuade their own employees that they should behave fairly and reasonably.
	I am advised that in the case of the charity that was being looked at by the commission, someone from the commission e-mailed a national newspaper with what I am told are false allegations. Why they should have e-mailed a national newspaper in any case, I do not know—it strikes me as being thoroughly unprofessional. I am also told that rumours were spread that the person running the charity was under investigation by the police. When they went to the police to find out if they were under investigation they were told that it was not the case. Those instances do not represent fair and reasonable behaviour and it would be of considerable assistance to those at the head of the Charity Commission if these words were in the Bill. I beg leave to withdraw Amendment No. 13.

Amendment, by leave, withdrawn.

Lord Swinfen: moved Amendment No. 14:
	Page 7, line 20, leave out ", so far as relevant,"

Lord Swinfen: My Lords, I beg to move.

On Question, Whether the said amendment (No. 14) shall be agreed to?
	Their Lordships divided: Contents, 79; Not-Contents, 130

Resolved in the negative, and amendment disagreed to accordingly.

Lord Swinfen: had given notice of his intention to move Amendment No. 15:
	Page 7, line 25, at end insert "and shall be fair and reasonable"

Lord Swinfen: My Lords, in view of the vote on the previous amendment, I shall not move this one.

[Amendment No. 15 not moved.]

Lord Bassam of Brighton: moved Amendment No. 16:
	Page 7, line 25, at end insert—
	". In performing its functions the Commission must have regard to the desirability of facilitating innovation by or on behalf of charities."

Lord Bassam of Brighton: My Lords, the noble Lord, Lord Phillips, has tabled Amendment No. 17 as an amendment to the Government's amendment. On 28 June, the noble Lord, Lord Hodgson, moved an amendment that would have given the Charity Commission the general function of facilitating development and innovation in the charitable sector. On a Division, your Lordships' House produced a tied vote, which meant that, by the narrowest margin, the amendment was not carried.
	Since then, we have reflected further on the matter. We see merit in the proposition of the noble Lord, Lord Hodgson, which, I understand, is supported by the Charity Commission, so we have devised an amendment to give effect to it. Rather than give the Charity Commission a new general function of facilitating innovation, our amendment would give it a new duty that would apply to it in carrying out all its functions. The wording of the duty is very closely based on that of the equivalent duty applying to the Financial Services Authority, which the noble Lord, Lord Hodgson, has commended to your Lordships' House in the past.
	I have also reflected further on the amendment tabled by the noble Lord, Lord Phillips of Sudbury. There may be a way in which we can incorporate it into the government amendment. In view of that, I hope that we now have unanimity on the issue across your Lordships' House. I beg to move.

Lord Phillips of Sudbury: moved, as an amendment to Amendment No. 16, Amendment No. 17:
	Line 2, after "must" insert ", where appropriate,"

Lord Phillips of Sudbury: My Lords, I am grateful for the undertaking that the noble Lord, Lord Bassam, gave at the end of his introduction of Amendment No. 16. It leaves me with little to say beyond the fact that NCVO, among many charities, was anxious about the effect of placing just a bare duty on the commission to have regard to the desirability of facilitating innovation. Just adding the words "where appropriate" or something like that would dispel its anxiety that an intervening commission could thunder around requiring innovation on all occasions by all charities—although that is highly unlikely, one must allow for the possibility. Many charities are not in the business of innovation at all; for example, almshouses are in the business of anything but that. I beg to move.

Lord Hodgson of Astley Abbotts: My Lords, I thank the Government and the Minister for taking on board the result of the score draw on 28 June. I accept that the Charity Commission is at root a regulator and therefore needs to keep an eye on the road immediately in front of it, but from time to time it should raise its eyes to the hills and think more strategically and dynamically about the sector that it regulates. I am extremely grateful that the Government have taken our proposal on board. I am delighted with the amendment and thank the Minister very much.

Lord Phillips of Sudbury: My Lords, I beg leave to withdraw the amendment.

Amendment No. 17, as an amendment to Amendment No. 16, by leave, withdrawn.
	On Question, Amendment No. 16 agreed to.

Lord Swinfen: moved Amendment No. 18:
	Page 7, line 28, at end insert—
	"6. In performing its regulatory functions the Commission must have regard to the reasonable interests of trustees, charity staff, volunteers, donors, beneficiaries and other stakeholders in charities."

Lord Swinfen: The amendment would require the Charity Commission to have regard to the interests of the people involved in charities as well as a charity's material assets. Those people include especially charity beneficiaries, who are often singularly unable to defend their own interests.
	The commission has sometimes acted in a cavalier fashion towards a charity's people. Such behaviour has occurred and has been the subject both of Independent Complaints Reviewer findings and of admission, in retrospect, by the commission itself. The effects of such regulatory behaviour in certain cases have been deeply damaging to charity—to charities, trustees, volunteers and, most importantly, their beneficiaries.
	In moving this amendment, designed to have particular regard to the interests of people involved in charities, I am aware that my earlier reference to some effects of Charity Commission regulatory conduct in the past may have given offence in certain quarters. I believe, however, that the absence of any mention of beneficiaries in the Charities Act 1993—and of their needs and interests—may have been a contributory cause of the failure of the commission as regulator to consider the possible effects of its actions and orders upon beneficiaries, who are among the most vulnerable and poorly protected members of society. Perhaps I should have looked at the matter when I took part in the debates on the Bill when it went through the House. Sadly, it stands to reason that if charity funds are summarily frozen and trustees and volunteers prevented from carrying on their humanitarian work, beneficiaries who may be partly or wholly reliant on such help, support and protection for their subsistence or safety may be seriously disadvantaged and damaged, at the very least. Think what would happen today if Oxfam's funds were all suddenly frozen and it could not help those in Pakistan, Kashmir and north-west India.
	A careful reading of the Charities Act 1993 and the sections relating to the regulatory powers of the commissioners, and the circumstances under which those powers can be exercised will demonstrate beyond question that it is the material assets of a charity—its property and funds—that are to govern the exercise of regulatory powers. Important though it must be to protect such material assets, current charity law does not appear to place a sufficient emphasis or duty on the commission to pay particular regard to the reasonable interests of charity people.
	Surely in this century this Charities Bill should strive to redress the balance between the proper and necessary protection of a charity's property and the need to protect the interests and needs of the people who deliver or depend on such services. When we last debated the issue in Committee on 28 June, the Minister said that the amendment was not necessary. At col. 193 she said that that was because the Bill required the Commission to be "accountable and transparent" and that it "takes customer service seriously. She continued:
	"Last year, it established a group called the Customer Network for people from across the sector . . . to give feedback".—[Official Report, 28/6/05; col. 193.]
	Even when the commission takes customer service seriously, and has established a feedback group, it is still possible that it may not have at the forefront of its mind a prime requirement to protect a charity's beneficiaries when exercising its regulatory powers.
	The amendment would put on the face of the Bill a specific duty on the commission when exercising its regulatory powers to take full account of the reasonable needs and interests of charity people before it acts. After 400 years of charity law and regulation, with its heavy emphasis on the protection of the material assets of charities, would it not be right, fair, helpful and encouraging to all involved in the sector to see a specific duty placed on the commission to have regard to the interests of charity people? Surely the Government and the House should be prepared to accept a helpful and useful amendment. I beg to move.

Lord Bassam of Brighton: My Lords, as the noble Lord, Lord Swinfen, said, we discussed this at Second Reading and in Committee on 28 June. The noble Lord is concerned about the issue. In Committee he said:
	"There is a significant gap in the regulation of charities which has historically been concerned only with the material assets of a charity".
	He also said:
	"As charities exist for their beneficiaries, it is rather odd that charity law allows the regulator to ignore their interests".—[Official Report, 28/6/05; col. 193.]
	I take issue with the assertion that there is a gap either now or when the Bill is passed. Section 1(4) of the Charities Act 1993 states:
	"It shall be the general object of the Commissioners so to act in the case of any charity . . . as best to promote and make effective the work of the charity in meeting the needs designated by its trusts".
	I repeat the phrase,
	"the needs designated by its trusts".
	Whose needs? It is the beneficiaries' needs. The commission's new objectives in the Bill also have the interests of beneficiaries.

Lord Swinfen: My Lords, did the Minister say "Section one four"?

Lord Bassam of Brighton: My Lords, I did indeed say Section 1(4).

Lord Swinfen: My Lords, Section one, four—Section 14—refers to
	"cy-près of gifts of donors unknown or disclaiming",
	according to my copy of the Act.

Lord Bassam of Brighton: My Lords, I think that the noble Lord is right about Section 14. I shall check that point.
	The commission's new objectives in the Bill also have the interests of beneficiaries running through them. Let us take, for example, the charitable resources objective, inserted by Clause 7 with new Section 1B. That objective is that the commission must promote the effective use of charitable resources. We can only judge how effective a charity is in using its resources with reference to whether the needs of the beneficiaries are being met effectively. The commission cannot meet this objective without considering the needs of beneficiaries.
	The noble Lord's amendment goes further than the interests of beneficiaries, to include the interests of trustees, charity staff, volunteers, donors and other stakeholders in charities. Again the objectives and duties in the Bill clearly encompass the commission giving consideration to such other interested parties. One example is that the commission's first objective will be to increase public trust and confidence in charities.
	Another example is that the commission is proactively seeking the views of those groups through the Customer Network, as my noble friend Lady Scotland mentioned in Committee. This is a formal channel through which those affected by the commission can have their say, and which will influence directly the commission's work.
	A final example is the commission's accountability objective in the Bill. The commission must enhance the accountability of charities to donors, beneficiaries and the general public. The commission, in performing its own function, so far as is reasonably practicable, must act in a way which is compatible with its objectives and which it considers most appropriate for the purpose of meeting those objectives. In terms of the specific interests of donors and volunteers, the Bill gives the commission the duty to,
	"act in a way which is compatible with the encouragement of . . . all forms of charitable giving, and . . . voluntary participation in charity work".
	I hope that I have demonstrated that we can see that the intention behind the amendment is good, but there are many ways in which the Bill meets the needs identified by the noble Lord, Lord Swinfen. It is for those reasons that it is unnecessary for us to accept the amendment.
	The noble Lord, Lord Swinfen, was right in his earlier assertion about Section 14.

Lord Swinfen: My Lords, I did not hear which section the noble Lord referred to. Will he repeat it?

Lord Bassam of Brighton: My Lords, Section 14.

Lord Swinfen: My Lords, I thought that was what he said the first time, but as I said, Section 14 refers to:
	"Application cy-près of gifts of donors unknown or disclaiming".
	I am not sure that "one, four"—14—is the right section for the Minister to be quoting. Perhaps he will write to me to tell me the right section so that we do not delay matters. I shall read with care what the noble Lord said, and will then come back to the matter before the next stage of the Bill.

Lord Phillips of Sudbury: My Lords, would it help if I suggested that we are discussing Section 1 subsection 4—1(4)?

Lord Bassam of Brighton: My Lords, I am sorry, I misread my note.

Lord Swinfen: My Lords, I am grateful to both noble Lords for that clarification. Obviously something got left out of the Minister's notes. We all do it. My handwriting is so bad that my wife tells me that she is still unable to read the letters I wrote to her before she was unwise enough to accept my offer of marriage. Had she been able to read them, she might not have accepted. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	Clause 8 [The Charity Appeal Tribunal]:

Lord Bassam of Brighton: moved Amendment No. 19:
	Page 8, line 8, leave out "Appeal"

Lord Bassam of Brighton: My Lords, in moving Amendment No. 19 I shall speak to the large number of amendments grouped with it.
	Noble Lords will remember that in Committee on 28 June I undertook to give further consideration to an amendment tabled by the noble Lord, Lord Hodgson, that would have extended the functions of the Charity Appeal Tribunal. The noble Lord's amendment would have given the tribunal the additional function of considering matters referred to it by the Attorney-General or, with the Attorney-General's consent, by the Charity Commission, the reference being made before the commission had made any decision on the matter.
	This group of amendments is the result of our considerations. Because it is a rather fearsome-looking group, I shall explain with some care what effect it would have. As drafted, the Bill would give the tribunal two functions. In summary, these are, first, considering appeals against specific decisions, directions or orders made by the commission; and, secondly, reviewing decisions by the commission to open statutory inquiries and decisions by the commission not to do other specified things.
	The amendments will give the tribunal a third function; namely, determining a matter referred to it, before the commission has made any decision on the matter, by the Attorney-General or the commission. The commission's power to refer a matter to the tribunal will be excisable only with the Attorney-General's consent. Both the attorney and the commission will be able to refer to the tribunal questions involving the operation or the application of charity law. In addition, the commission will be able to refer questions about the exercise of its own functions.
	The attorney or the commission will always be party to proceedings on its own references and will be entitled to join itself as a party to proceedings on references by the other. The tribunal may allow any charity or other person who is likely to be affected by its decision to be party to the proceedings.
	As with proceedings under the tribunal's two other functions—appeals and reviews—we propose that each party should generally bear its own costs. The exception to that will, as in the other two cases, be that the tribunal may order a party who has acted vexatiously, frivolously or unreasonably to pay other party's costs. The noble Lord, Lord Phillips, would give the tribunal an extra power to order the Attorney-General or the commission, as the case may be, to pay other parties' costs, but we do not think that that is necessary or desirable.
	Proceedings on references to the tribunal will generally not be adversarial since the purpose will essentially be to help clarify the law where the commission has not yet made a decision. An affected person or charity wanting to have their own view of the law taken into account by the tribunal may join himself as a party and should pay his own costs if he decides to do that. But he need not join himself as a party, since the attorney or the commission will be able to ensure that his view is put across to the tribunal. By choosing that route the person or charity will not have to be represented, will not incur any costs at the proceedings, but will have their view taken into consideration.
	Where the reference is about the application of charity law to any particular state of affairs, the commission will be prevented from taking any action based on its own view of the law until the tribunal has made its decision. The exception to that will be that the commission can act before the tribunal has made its decision if all of the parties to the proceedings, and any charities likely to be affected by the commission's action, agree that the commission can act.
	After the tribunal has made a decision on a reference about the application of charity law to any particular state of affairs, the commission will have to give effect to the tribunal's decision. There will be no appeal allowed to the tribunal against a commission decision which gives effect to the tribunal's earlier decision.
	With that extra function of determining references, the tribunal will become more than an appeal tribunal. The name Charity Appeal Tribunal will no longer, we think, therefore be appropriate. We therefore propose to change it to Charity Tribunal, and to make the same change for the Welsh equivalent of the name. The amendments in this group achieve that change of name. I beg to move.

Lord Hodgson of Astley Abbotts: My Lords, I am grateful to the Minister and the Government for having tabled this group of amendments to deal with the points that we discussed in Committee. Perhaps I may ask one question. I have not had a chance to check this, because I read this only just before we came in here. Under Amendment No. 50, new paragraph 1(2), headed, References by Commission, states:
	"The Commission may make such a reference only with the consent of the Attorney General".
	When the Minister introduced this, he said that he was following the amendment that I proposed on 28 June. I was not aware that I had cross-referenced in that way. Fortunately, I have a copy of Hansard to hand. The amendment read:
	"In addition to the appeals and applications which may be made to the Tribunal pursuant to the provisions of Schedule 4 to this Act, the Attorney General or the Commission may of their own volition refer to the Tribunal such issues relating to the application of the charity law as they may consider should be reviewed and determined by the Tribunal".—[Official Report, 28/06/05; col. 216.]
	I am extremely grateful to the Government for having made those steps, but I am not quite sure why the commission should have to clear everything with the Attorney-General. That was not in my original amendment, which I have just read out. I was slightly disturbed, because the commission seems to be freestanding and we want it to be able to go to the tribunal, as we now call it, without having to get clearance.
	It may be that I have missed an extraordinarily specialist, detailed point of administrative law and that this is how it always works. Can the Government explain that, because I am slightly concerned by it?

Lord Phillips of Sudbury: My Lords, I commend the Government on Amendment No. 50, which is a significant improvement to the Bill. I apologise for not giving notice of my question, but it occurred to me only on the Bench, so to speak. It relates to the fact, as the noble Lord said in moving the amendment, that there can be a reference by the commission to the tribunal at any time in connection with the exercise by the commission of any of its functions before a decision is made by the commission. I see the point of that perfectly.
	Under Amendment No. 50, new paragraph 1(4) sets out those who are,
	"entitled to be parties to proceedings before the tribunal on a reference".
	As well as including the Attorney-General, it states that with the permission of the tribunal,
	"the charity trustees of any charity which is likely to be affected . . .
	(ii) any such charity which is a body corporate, and
	(iii) any other person who is likely to be so affected".
	It may be that I have missed it, but I do not see in this amendment any duty on the part of the commission in making such a reference to so advertise the reference and the point and purpose of the reference that any person likely to be affected by it would know in time to make application to the tribunal to be admitted a party to those proceedings.
	I apologise if I am raising a matter for which there is an answer. I am not expecting the Minister to respond here and now, but I would like him to comment on the reasonableness of my question and that, if it proved the case that there is no mechanism for public notification of such a reference, there will be something in the Bill at Third Reading.

Lord Bassam of Brighton: My Lords, I do not have an answer to the point made by the noble Lord, Lord Phillips. It is certainly a reasonable question. I await advice. It seems to me quite reasonable that people should be put on notice.
	In response to the question asked by the noble Lord, Lord Hodgson, the reason for the amendment being in the terms in which it is is simply because it has the effect of reducing the costs. The purpose is to ensure that the attorney and the commission do not simply duplicate work and that the commission does not inadvertently act without the attorney's knowledge. It is simply to ensure that there is a common understanding behind the approach that is being adopted.

On Question, amendment agreed to.

Lord Bassam of Brighton: moved Amendment No. 20:
	Page 8, line 8, leave out "Appeal"
	On Question, amendment agreed to.

Lord Bassam of Brighton: moved Amendment No. 21:
	Page 8, line 12, leave out "Tribunal" and insert "constitution of the Tribunal and other matters relating to it"

Lord Bassam of Brighton: My Lords, this is a drafting amendment suggested by parliamentary counsel. Essentially, its effect is to improve the clarity of the Bill's wording. I beg to move.

On Question, amendment agreed to.

Lord Bassam of Brighton: moved Amendments Nos. 22 to 25:
	Page 8, leave out lines 13 and 14 and insert—
	"(4) The Tribunal shall have jurisdiction to hear and determine—
	(a) such appeals and applications as may be made to the Tribunal in accordance with Schedule 1C to this Act, or any other enactment, in respect of decisions, orders or directions of the Commission, and
	(b) such matters as may be referred to the Tribunal in accordance with Schedule 1D to this Act by the Commission or the Attorney General.
	(5) Such appeals, applications and matters shall be heard and determined by the Tribunal in accordance with those Schedules, or any such enactment, taken with section 2B below and rules made under that section."
	Page 8, leave out lines 16 to 18.
	Page 8, line 21, at end insert "and matters relating to the making of references to it"
	Page 8, line 26, leave out from "which" to "to" in line 27 and insert "must be taken before appeals, applications or references are made"
	On Question, amendments agreed to.

Lord Bassam of Brighton: moved Amendment No. 26:
	Page 8, line 27, leave out "those" and insert "any such"

Lord Bassam of Brighton: My Lords, this is a minor drafting amendment suggested by parliamentary draftsmen. Our intention is that where rules made by the Lord Chancellor require a person to take particular steps before appealing or applying to the tribunal, the rules may also specify the period within which any steps are to be taken. We thought the current wording might be read as requiring a period to be specified, rather than allowing a period to be specified. This amendment simply puts that issue beyond doubt. A period can be, but need not be, specified. I beg to move.

On Question, amendment agreed to.

Lord Bassam of Brighton: moved Amendment No. 27:
	Page 8, line 35, leave out "or applications" and insert ", applications or references"
	On Question, amendment agreed to.

Lord Bassam of Brighton: moved Amendment No. 28:
	Page 8, line 41, at end insert—
	"( ) for matters to be determined without an oral hearing in specified circumstances;"

Lord Bassam of Brighton: My Lords, in most proceedings before the tribunal the parties will present their own cases in an oral hearing, but there may be some circumstances—for example, where there is extreme urgency for a decision, or where all parties feel that they have nothing to add to what they have said in the papers they have put before the tribunal—where an oral hearing is not at all necessary. Therefore, we think it is sensible to enable the Lord Chancellor's rules to provide for a matter before the tribunal to be determined without an oral hearing in specified circumstances. This amendment achieves that simple objective. I beg to move.

Lord Phillips of Sudbury: My Lords, I see the point of Amendment No. 28, but it is quite open-ended, allowing matters to be determined without a hearing in specified circumstances. Will it be open to the Government to specify, within the rules, what the specified circumstances are without limit? These are difficult issues to take on the hoof, but will the Minister also give a reassurance that the rules that may be made in that regard will be common-sensical, as I would call them, and not take advantage of the breadth of the allowance?

Lord Bassam of Brighton: My Lords, the noble Lord asks a perfectly reasonable question. Clearly, the Lord Chancellor's rules need to be drafted very carefully. This is a common-sense issue, enabling matters to be considered on paper rather than having the formality of an oral hearing. I have no doubt that we shall want to consult very carefully on the drafting of those rules. I know that consultation takes place on drafting matters. I hear what the noble Lord says and I seek to reassure him on that. Clearly, we are trying to be facilitative and helpful rather than sneaking something in that has some wily or secondary purpose. That is not the intent at all and I cannot think of any circumstances when it would be the intent of the Government.

On Question, amendment agreed to.

Lord Bassam of Brighton: moved Amendment No. 29:
	Page 9, line 6, leave out "and applications" and insert ", applications or references"
	On Question, amendment agreed to.

Lord Bassam of Brighton: moved Amendment No. 30:
	Page 9, line 8, leave out "(see subsection (5))"

Lord Bassam of Brighton: My Lords, Amendment No. 30 is grouped with an amendment in the name of the noble Lord, Lord Phillips. Our amendment is designed to do no more than remove an uncertainty that might otherwise exist in the provisions that the amendment replaces. Our intention has always been that the tribunal should have power to award costs against any party to proceedings that the tribunal believed had acted vexatiously or frivolously or in some way unreasonably. As the present provisions are drafted, we believe that they may be capable of being read as though the tribunal's power in that respect did not extend to the Charity Commission. We do not want there to be any doubt that the tribunal has the power to award costs against the commission where, as a party to proceedings, it has acted vexatiously, frivolously or unreasonably. We do not want the commission to be put in a special place. Accordingly, we have tabled this amendment to remove any doubt.
	The amendment tabled by the noble Lord, Lord Phillips, distinguishes between the reasonableness of a Charity Commission decision, direction or order and the reasonableness of the commission's conduct in reaching that decision. Of course, making a judgment on the former falls squarely within the tribunal's remit, but on the latter it does not and should not, because essentially it is about whether the commission has properly handled the casework leading up to the decision. As I have said before, that is for the commission's independent complaints reviewer and/or the Parliamentary Ombudsman to judge. It is a matter of administrative competence, not of law.
	Even if in a particular case the tribunal found a decision reasonable, it would be perfectly possible for the ombudsman to find the commission guilty of poor administration in reaching that decision—if, say, long delays by the commission in reaching the decision had caused a charity some loss or harm.
	I believe that the noble Lord will accept that these are two quite separate considerations. I cannot see any merit in extending the tribunal's remit into the ombudsman's territory in this duplicative way. I beg to move.

Lord Phillips of Sudbury: My Lords, I am slightly lost. I am not sure that I have not acted with undue patience in having the Minister answer an amendment before I have moved it. He took a liberty at seven o'clock at night on the 353rd hour of consideration of this Bill, and I cannot blame him. He put the counterargument rather well and I am inclined to withdraw my Amendment No. 33 because I see that, if the tribunal were given the power to consider the conduct of the commission in reaching a decision, direction or order, that could allow a huge enlargement of cases and there may never be an end to them. Later, under Amendment No. 34, I shall have an opportunity to urge on the House the need for some kind of suitors' fund, but for the moment I am content not to move Amendment No. 33.

On Question, amendment agreed to.

Lord Bassam of Brighton: moved Amendment No. 31:
	Page 9, line 8, at end insert—
	"( ) Rules under subsection (2)(a) or (b) above may confer a discretion on—
	(a) the Tribunal,
	(b) a member of the Tribunal, or
	(c) any other person."

Lord Bassam of Brighton: My Lords, noble Lords will be aware of the principle that delegated legislation, such as rules or regulations made by a Secretary of State under a power conferred by Parliament, may not, unless the primary legislation specifically allows it to do so, further delegate a discretion to any other persons. This amendment is to authorise the Lord Chancellor to sub-delegate in his rules regulating the exercise of appeal rights and his rules about practice and procedure in tribunal proceedings.
	That would, for example, allow the tribunal or its members discretion to adapt the prescribed procedures to the needs of parties in particular cases. It would also allow the rules to require the Attorney-General or the Charity Commission to take reasonable steps to notify a charity of the intention to refer to the tribunal a matter affecting the charity. Without the amendment, neither would be possible. I beg to move.

Lord Phillips of Sudbury: My Lords, what is meant in Amendment No. 31 by "any other person"? The amendment allows rules to be promulgated conferring discretion on,
	"(a) the Tribunal, . . . (b) a member of the Tribunal, or . . . (c) any other person".
	That cannot mean the man in the moon. What does it mean?

Lord Bassam of Brighton: My Lords, I take it to mean those who are relevant to the proceedings. The noble Lord has a point and I will reflect on that.

On Question, amendment agreed to.

Lord Bassam of Brighton: moved Amendment No. 32:
	Page 9, leave out lines 9 to 17 and insert—
	"(5) The Tribunal may award costs only in accordance with subsections (5A) and (5B) below.
	(5A) If the Tribunal considers that any party to proceedings before it has acted vexatiously, frivolously or unreasonably, the Tribunal may order that party to pay to any other party to the proceedings the whole or part of the costs incurred by that other party in connection with the proceedings.
	(5B) If the Tribunal considers that a decision, direction or order of the Commission which is the subject of proceedings before it was unreasonable, the Tribunal may order the Commission to pay to any other party to the proceedings the whole or part of the costs incurred by that other party in connection with the proceedings."
	[Amendment No. 33, as an amendment to Amendment No. 32, not moved.]
	On Question, amendment agreed to.

Lord Phillips of Sudbury: moved Amendment No. 34:
	Page 9, line 17, at end insert—
	"( ) The Lord Chancellor may, after such consultations as he shall think fit, establish a suitors' fund to widen access to the Tribunal by assisting with payments of applicants' costs and may make rules for the purpose."

Lord Phillips of Sudbury: My Lords, a comparable amendment tabled by the noble Lord, Lord Swinfen, is grouped with this amendment. I return to the issue of a suitors' fund without any embarrassment or reluctance, because one of the great flaws of the Bill is to have no prospect of legal assistance for those seeking to take advantage of the charity tribunal.
	Our law is cluttered with tribunals that afford theoretical remedy to agreed citizens but are inaccessible because they are so expensive to access. I spoke to the noble and learned Lord, Lord Mackay of Clashfern, on this matter before he had to leave. He concurred in the number of such tribunals that suffered that crippling defect. As the National Council for Voluntary Organisations said in its briefing, the very evolution of charity law itself—and particularly the definition of what is charity—has been thwarted over decades because of the cost of getting proceedings before the High Court.
	As I have said before, it is very important to understand that the costs of going to the charity tribunal are not likely to be significantly less than going to the High Court when dealing with an issue such as charity status. Non-access to the legal remedies that the state provides is now commonplace across the board. I passionately believe that we need to introduce into the Bill at least the prospect of some assistance with applicants' costs with respect to the tribunal.
	Amendment No. 34 is permissive in allowing the Lord Chancellor after consultation to establish a suitors' fund,
	"to widen access to the Tribunal by assisting with payments of applicants' costs and . . . make rules for the purpose."
	I do not see how the Government can or should object to a permissive power. It will be in the hands of the Government and the Lord Chancellor whether or not they exercise it. I do not want to walk away from the Bill leaving it in a state where to get a suitors' fund off the ground would require primary legislation. Since the need for the suitors' fund will be quickly apparent, I urge this matter on the House tonight with all the strength I can muster. I beg to move.

Lord Swinfen: My Lords, I agree with all that has been said by the noble Lord, Lord Phillips, regarding the amendment which deals with a suitors' fund designed to provide access to the tribunal. My amendment, Amendment No. 39, provides for a suitors' fund to enable charities to take their case to the High Court. I prefer the wording of the amendment tabled by the noble Lord, Lord Phillips. If he were prepared to include the issue of the courts in addition to the tribunal, it would be a better amendment and both cases would be covered. Far fewer cases would go to the High Court than to the tribunal.
	In Committee, the amendment that I moved was opposed by the Minister. That is always the case when I move an amendment but I get over that. He opposed it on the grounds that the Legal Services Commission will be able to grant exceptional funding in certain cases, usually public interest or test cases. However, the noble Lord, Lord Phillips, who is an extremely eminent charity lawyer, replied that he was unaware of the legal authority of the Legal Services Commission and that the general position has been that legal aid is unavailable to charities. The noble Lord is not alone in that belief. I failed to find any charity lawyer who has ever heard of the idea of legal aid for charities. If it is available in practice they might be expected to know about it. However, the Minister says that the Legal Services Commission is able to grant it. Will he give chapter and verse when replying?
	The Minister also argued at col. 216 of the report of our proceedings on 28 June that the Attorney-General has power to intervene on behalf of charities and test cases and that that, coupled with legal aid, is sufficient. I do not believe that total reliance on the Attorney-General or the Legal Services Commission helping poor charities is either sensible or adequate.
	I reiterate that the creation of a suitors' fund was a recommendation of the Prime Minster's Strategy Unit and has received the strongest possible support from the charity sector, including the NCVO and a number of other representative voluntary bodies. From their knowledge and experience of the sector and its needs, they do not believe that the further development of charity law should depend on the willingness or ability of charities, trustees and others to pay for appeals to the tribunal or the court. Nor do they, or I, believe that the Attorney-General can invariably be relied on to take such appeals forward.
	I approve of the amendment moved by the noble Lord, Lord Phillips. Going to the High Court and the tribunal should be amalgamated into one amendment. Perhaps we can look at that together at the next stage if he does not press the amendment to a Division this evening.

Lord Bassam of Brighton: My Lords, we have debated already the possibility of establishing a suitors' fund. Indeed, we debated identical amendments in Committee. It is a pity that noble Lords did not put their amendments together for this debate. Essentially our position remains the same, but I shall restate the salient points.
	In establishing the Charity Appeal Tribunal, the Government's intention is to widen access to charity law, a move which has been broadly welcomed. If it is to be a success, the tribunal must be accessible to charities both large and small, and we intend it to be so. We have already accepted that there might be a small number of cases of clear public interest where the issues are complex and the appellant might need legal advice and representation, but does not have the resources to engage them.
	In our view, there are two safeguards in such circumstances. First, the Attorney-General will have a power to intervene as a party to proceedings, which may well be exercised in complex cases, and could relieve the appellant of much of the cost of engaging legal representation. Secondly, legal aid may be available in certain circumstances to individuals appealing to the tribunal, which could include the trustees of unincorporated charities. Where the individual meets the criteria for financial eligibility, legal advice and assistance may be available before the tribunal begins. This may extend to obtaining counsel's opinion or submitting a written case to the tribunal. While legal aid does not normally fund full representation by way of an advocate before most tribunals, funding can be made available to individuals in exceptional circumstances.

Lord Phillips of Sudbury: My Lords, I am sorry to interrupt the noble Lord. I am grateful to the noble Lord, Lord Swinfen, for raising a matter on which I myself pressed the Minister on the last occasion. He did say that he would write to me about it. I have told his officials that I have not received that letter and I am still unaware of it. I am also unaware of the authority that he refers to. Perhaps there is a problem in communication, but he is again asserting something which I am not aware is the case. But I take it that he has his facts right and I shall sit down.

Lord Bassam of Brighton: My Lords, I can recall signing the letter and I am told that it was handed to the noble Lord, Lord Phillips, on Monday this week. So I am somewhat puzzled that the noble Lord has not received it.

Lord Phillips of Sudbury: My Lords, it must have been the other Lord Phillips, the Lord Chief Justice.

Lord Bassam of Brighton: My Lords, we had better check on that, but I think not. The noble Lord, Lord Phillips, is far too well known for us to make such an error.

Lord Phillips of Sudbury: My Lords, I am sorry; I have just nodded to the Minister's officials in the Box. I now recollect that I was handed a letter, and I also recollect that I never read it. So I am altogether covered in confusion and I withdraw the point.

Lord Bassam of Brighton: My Lords, the noble Lord has been very gracious in admitting his failed recollection.
	Where appropriate, exceptional funding may be available in cases of significant wider public interest or where the issues are so complex that it would be impossible for applicants to represent themselves in person. In summary, the Government therefore continue to believe that the case for a suitors' fund has not been made. However, Clause 71 provides for a report on the operation of the legislation to be made within five years of Royal Assent. This will give us an opportunity to look at the impact of the tribunal and whether access to it is being frustrated by the costs of bringing a case before it. With that in mind, I hope that the noble Lord will feel able to withdraw his amendment.
	When considering letters, I think that the noble Lord, Lord Swinfen, ought also to receive a copy of the letter to the noble Lord, Lord Phillips. I shall ensure that he receives one as a courtesy, and of course I will share that with the noble Lord, Lord Hodgson of Astley Abbotts.

Lord Swinfen: My Lords, I thank the noble Lord for that last remark. However, he has said that there will be a review of the workings of the legislation five years after it is enacted. That is quite a long time. Does he not appreciate that justice delayed is justice denied?

Lord Bassam of Brighton: My Lords, that aphorism is a common one, but I do not think that this will be a case of justice delayed being justice denied. We have been widely praised for bringing forward the notion of the tribunal and, as I have explained, we think that access will be facilitated to it. Moreover, there is the further benefit that the Attorney-General can bring forward public interest cases and so forth. But, should a serious issue arise which can be seen to frustrate those who wish to bring cases before the tribunal, any review of the legislation would look at that. However, we think that a period of five years is appropriate in terms of review. It is not an uncommon period to adopt for legislative review and we believe that we have the balance about right.

Lord Phillips of Sudbury: My Lords, I am grateful to the Minister for that response, but I am afraid that I remain unswayed in my conviction that this tribunal will be stillborn without effective legal advice and assistance. It really does no good to say that the Attorney-General will take the occasional case. Indeed, it was my own correspondence with the Attorney-General that opened the door to his agreeing to take occasional cases. In correspondence we talked about one or two cases a year. Nor is it any response to the lacuna I am drawing attention to that the Minister has ascertained that, in exceptional cases involving the wider public interest, the taking of counsel's opinion will be allowed or, in even more exceptional circumstances, representation. I know the workings of the Legal Services Commission very well and I can assure the House that, given its general way of working, the number of cases that will fit those two categories will be minuscule. We are talking about perhaps two or three cases a year. But we are expecting the traffic brought before the tribunals to be hundreds of cases a year, not two or three. So I repeat that this central part of the Bill will not be just impeded, but wholly undermined by the absence of a fund of this sort.
	Even at this late hour, I am afraid that I do wish to test the opinion of the House.

On Question, Whether the said amendment (No. 34) shall be agreed to?
	Their Lordships divided: Contents, 54; Not-Contents, 102

Resolved in the negative, and amendment disagreed to accordingly.

Lord Bassam of Brighton: moved Amendments Nos. 35 to 36:
	Page 9, line 27, leave out "on a point of law"
	Page 9, line 27, at end insert—
	"(1A) Subject to subsection (1B) below, an appeal may be brought under this section against a decision of the Tribunal only on a point of law.
	(1B) In the case of an appeal under this section against a decision of the Tribunal which determines a question referred to it by the Commission or the Attorney General, the High Court—
	(a) shall consider afresh the question referred to the Tribunal, and
	(b) may take into account evidence which was not available to the Tribunal."
	On Question, amendments agreed to.

Lord Davies of Oldham: My Lords, I beg to move that further consideration on Report be now adjourned. In moving the Motion, I suggest that the Report stage begin again not before 8.30 pm.

Moved accordingly, and, On Question, Motion agreed to.

Natural Environment and Rural Communities Bill

Brought from the Commons; read a first time, and ordered to be printed.

United Nations Convention Against Torture

Baroness D'Souza: rose to ask Her Majesty's Government what they are doing to meet their obligations as a party to the United Nations Convention Against Torture.
	My Lords, we live in a complicated world, morally, ethically and philosophically. Today, I want to set out, very briefly, the legal basis for the protection of a fundamental human right; namely, the right to be free from torture and other cruel, inhuman or degrading treatment or punishment.
	The impetus for this debate arises from the awesome dilemma facing any government on how to balance this fundamental right with the responsibility of protecting the security of a nation and its inhabitants. While there is no suggestion that the UK seeks to derogate from its obligations under the UN Convention Against Torture, there is some question how far the Government will act to prevent or condone torture that may occur as a result of political decisions. I refer to the policy of removals of failed asylum seekers to countries where torture is likely, and the doubtful validity of diplomatic assurances of non-torture. I refer also to the potential complicity with the US practice of "rendition"—a word that masks the inhuman practice of outsourcing torture—and to the admissibility in the British courts of evidence extracted under torture. I must declare an interest as a former director of, and present consultant to, the Redress Trust, an organisation dedicated to achieving justice for torture survivors.
	The prohibition of torture has a special place in that array of international law and treaties that governs human rights more generally: the Convention Against Torture; the International Covenant on Civil and Political Rights; the Inter-American Convention to Prevent and Punish Torture; the European Convention on Human Rights and many others. All of them prohibit torture in the strongest terms.
	Torture is outlawed also by the four Geneva Conventions of 1949, their two Additional Protocols and by national constitutions throughout the world. Freedom from torture has been declared time and again as a non-derogable right, signalling that, no matter what the circumstances, torture can never be legal. A significant body of jurisprudence arising from the European Court of Human Rights and the UN International Criminal Tribunals for Yugoslavia and Rwanda, among other courts, has allowed this right to evolve into a peremptory norm. The prohibition of torture is placed at the highest level of international law and takes precedence over any conflicting rules of treaty law or customary international law.
	The UK is either a signatory to these international instruments or fully supportive of them for good reason: torture as defined in the UN convention aims not only to inflict severe physical and mental pain, but also, above all else, to degrade, depersonalise and dehumanise its victims. In this, it is often successful, and the loss of dignity can affect the survivor and his or her family for many, many years. Some never recover to become fully functional members of society. The policy of torture goes beyond the individual victim. It is of profound concern to the world community because its intended consequences are to damage the will and coherence of whole communities.
	Consider the consequences of the appalling abuse Iraqi prisoners have suffered at the hands of US—female US—soldiers in Abu Ghraib. What will these mens' standing be in their communities, with their families? How or where will the anger engendered by such humiliation be directed? I suggest that the result will be the desire for murderous revenge in the form of terrorism.
	Nor is the UK entirely blameless in this context. A number of British soldiers have been convicted in courts martial of mistreating detained Iraqis, and other cases are pending. Torture is a criminal offence under our legislation; I refer to Section 134 of the Criminal Justice Act 1988. However, the Attorney-General has not made use of this Act to underline the seriousness with which these abuses must be dealt. When mistreatment amounts to torture it should be prosecuted as such and not as some other crime which carries a lesser penalty. To do so undermines the gravity of the act and, crucially, does not allow the victims to claim reparation.
	The UK is not a safe haven for torturers, as the recent conviction of a former Afghan warlord demonstrates. However, the Government's recent consultations and subsequent signing of the UN convention on state immunity appears contradictory. The convention bans civil claims in human rights cases, thereby precluding a fundamental principle of international law, namely the right to reparation. Other recent actions on the part of the UK Government give cause for concern. First, as has been passionately argued in this House, the removal of failed Zimbabwean asylum seekers to Harare, often accompanied by police and handed over to the security authorities is on the face of it an infringement of both the 1951 UN Convention on Refugees as well as the Convention Against Torture. These instruments make it abundantly clear that even the likelihood of torture is sufficient reason to stop these removals. This negates the Government's justification that there is no evidence of returnees being tortured, an assertion in any case which all those involved in Zimbabwean politics vigorously refute.
	Present conditions in Zimbabwe, as is extremely well documented, are brutal and torture is routine. Secondly, it has recently been reported that the UK has enabled American aircraft involved in transporting individuals to countries where they are likely to be tortured to use British airspace, landing and refuelling at British military and commercial airports involving over 200 flights. In one case an individual was apprehended in Indonesia by the US authorities and then transported to Cairo via the UK in the absence of any extradition hearing or judicial process.
	The precise legal obligation on the part of the UK Government in this context has yet to be fully examined, but in principle assistance in furthering torture is subject to an absolute prohibition. Thirdly, the Government appear determined to maintain the apparent loophole whereby evidence obtained under torture abroad is admissible in Special Immigration Appeals Commission hearings, provided that no UK agents were involved in the torture. If this is now law, I have to ask why the Government are testing the absolute prohibition against torture-tainted evidence, a prohibition that should be unequivocal in a country such as ours.
	Given the non-derogable prohibition on torture, the "ticking time-bomb" issue needs to be at least addressed. Should there be an exception in that most agonising possibility? Some would argue yes, that it must be permissible to violate an individual's rights to preserve the rights of the majority. Some have even advocated the use of warrants to regulate the use of torture. Without for the moment considering whether torture is an effective method to extract reliable information, the argument invokes the "defence of necessity" whereby a person is excused from criminal liability for his or her actions because they were deemed necessary to prevent greater harm.
	There cannot be a blanket defence of necessity that creates an exception to the absolute prohibition. There are no laws that provide such exceptions and for any state to enact a law would immediately conflict with international law. We also know from the evidence of torture survivors that the results of torture are often inaccurate and certainly unverifiable. We talk with optimism about ending or eliminating terrorism, but how logical is it to expect that brutality and degradation will be an effective instrument? How can we justify freedom from violence by the use of violence?
	It is worrying that we hear far too little about combating terrorism through non-military means. That would include a far greater commitment to intelligence networking across the world requiring in turn greater international co-operation: not only in confronting and eliminating terrorist action but in addressing the underlying causes; strengthening the UN Human Rights Treaty bodies and special procedures; more widespread efforts to freeze assets of those suspected of financing terrorism to end the climate of impunity, among other human rights actions.
	Defeating terrorism requires fine intelligence information. That must mean working with those who feel equal repugnance at the violence that has been perpetrated against the innocent and engaging them in the political process. The use of torture or other inhuman and degrading methods against a minority group risks alienating precisely those whom we need most in this struggle. The exercise or condoning of torture is a severe abuse of a fundamental right and will not enhance national security, but eventually erode it.

Lord Archer of Sandwell: My Lords, I offer my congratulations to the noble Baroness, Lady D'Souza, on initiating this timely debate and on her contribution to the campaign against torture, together with the work on redress to which she has made so great a contribution. It is literally beyond measure, because not only has it transformed the lives of some who are scarred by torture, but its value lies in the number of those who might have become victims but were spared that fate.
	The Government have a respectable record in domestic legislation and international initiatives in opposing torture. The differences that may appear in the debate are not of basic principles. The danger is that the devil creeps unnoticed into the detail and we need a ready supply of long spoons. Today the constraints on time limit me to one example, which has already been referred to by my noble friend. I chose it because it may help to prevent what would be a sadly mistaken state before the situation is unamendable.
	The anxiety is not that our Government would perpetrate torture but that they may turn their backs on the victims of torture perpetrated by others. The offence of the priest and the Levite on the Jericho road was not that they inflicted the injuries that the victim suffered but that they were indifferent to his sufferings. Often for many reasons the victim of torture cannot obtain redress in the courts of the country where it took place. International tribunals are remote and not always user friendly. If he can reach the United Kingdom he may hope to obtain redress here.
	The machinery is now in place to facilitate criminal sanctions in this country against those who perpetrate torture in other jurisdictions. However, as my noble friend said, civil reparations are a different matter. It is tempting to say that compensation is less important than punishing the wrongdoer, but it may be equally effective as a deterrent, and for the victim it may go some way towards mitigating the harm he has suffered as well as re-empowering him and helping to restore the dignity of which he has been robbed.
	As my noble and learned friend may know, Redress has pressed for that remedy to be provided in this jurisdiction. It is no academic point; even recently British nationals have complained of being subjected to torture in Saudi Arabia. The principal obstacle is the doctrine of state immunity—that the government of one state are immune from the domestic jurisdiction of another. It was established in the Pinochet case that in criminal proceedings for torture that objection cannot be sustained because torture, which is a crime in international law, can never qualify as an act performed by a head of state in the exercise of his functions. However, the position in civil proceedings is far from clear. When the convention on jurisdictional immunity, to which my noble friend referred, was being discussed and drafted, a number of anxieties were expressed that it might actually make the situation worse. I could elaborate on that but the clock, I fear, has spared your Lordships a lecture on the subject from me. No doubt my noble and learned friend and I can discuss it later.
	It is not the occasion to discuss the introduction of protocols and reservations but I hope that the Government will not ratify the convention until there has been an opportunity for a full debate on that subject. Of course I understand that parliamentary time does not lie wholly in the gift of my noble and learned friend, but the timing of the ratification is in the gift of the Foreign Office. I ask my noble and learned friend for an assurance that there will be no further irrevocable steps without a debate. I ask on behalf not of lawyers or academics or even of Redress but of victims and potential victims of torture whose hopes rest on this country.

Baroness Park of Monmouth: My Lords, we owe the noble Baroness much gratitude for initiating this important debate. The convention against torture to which this country is a signatory provides that no state party shall expel, return or extradite a person to another state where there are substantial grounds for believing he would be in danger of being submitted to torture. Relevant considerations include, where applicable, the existence in the state concerned of a consistent pattern of gross, flagrant or mass violation of human rights. Zimbabwe by the UN's own judgment in the recent report of the UN Special Envoy is such a state. It has never signed up to the convention yet it sits on the UN's Commission on Human Rights. The AU's Commission on Human Rights denounced Zimbabwe's record as long as 2002.
	The UN envoy reported that,
	"international, regional and local NGOs have been requested by the government not to get involved in assisting the victims of Operation Cleanse Up Filth"
	She said that the constrained humanitarian base has led some NGOs to leave the country entirely. Many described a climate of fear which has led both national and international NGOs to exercise "self-censorship" to avoid being closed down or evicted. The police detained a staff member of Action Aid for seven hours after she took pictures of aid being distributed by another NGO at Caledonia Farm. Several NGOs expressed fears of retribution following their testimonies to the UN mission. National NGOs fear taking any action which may provoke the Government, which has prevented them providing shelter and basic services to the thousands among the displaced population.
	This is the country to which, despite the passionate warning of Archbishop Ncube of Bulawayo that death will often await them, HMG are forcibly returning failed Zimbabwean asylum seekers. They are returned in handcuffs, accompanied by guards who hold their papers and who hand them over to the Zimbabwe authorities at the airport; that is, to the CIO. The very fact that they fled to Britain makes them enemies of the state.
	The Minister of State in the Home Office has told me that the British Embassy in Harare, working with those NGOs operating within the country, follows up allegations of ill treatment. The NGOs are already under serious threat of expulsion or closure thanks to the impending charity law. Is it likely that they will put their whole operation at risk and testify for a lone failed asylum seeker who, simply because he fled to the UK, is automatically labelled a Blair spy? How, in any case, is he to find such an NGO? In the present pervasive climate of fear and intimidation his first thought, if he is ever freed, will be to hide. The NGOs are unlikely to hear that he exists.
	I contend that HMG are in breach of the convention in this respect. Would a number of failed Zimbabwean asylum seekers have gone on hunger strike—described by the Home Secretary as "not taking their meals"; would he have dared say that about the IRA hunger strikers?—if they had not been in mortal fear of being returned? Did we do this to refugees from Hungary or the Soviet Union?
	The asylum decision-making and independent appeals process has contrived to reject the claims of such men as Crispen Kulinji who, as an active officer of the MDC was subjected to electric shocks which left him permanently scarred. He saw his mother and sister brutally attacked and was himself left for dead after interrogation. The leader of the MDC appealed to HMG not to deport him, but his status remains in suspense. After the recent judicial review, the Asylum and Immigration Tribunal is looking at new evidence on conditions in Zimbabwe, and that is good.
	Unless HMG takes immediate steps to improve the quality of the tribunals and of Home Office procedures, and to ensure that asylum seekers get good professional legal advice rather than leaving them to the mercy of unscrupulous Nigerian operators, it is virtually certain that we shall be sending innocent vulnerable people back to a brutal regime. It is ironic that despite the admirable UN report, two UN agencies, the Food and Agriculture Organisation and the World Health Organisation, have recently held a conference on food safety in Africa in Harare hosted by President Mugabe.

Baroness Williams of Crosby: My Lords, I, too, add my thanks to the noble Baroness, Lady D'Souza, and to those associated with the work that she has done over many years. I mention in that context some of the finest NGOs in this country, bodies such as Amnesty International, the Medical Foundation and the refugee legal council, which are marvellous examples of the very best that Britain has to offer.
	There are three things terribly wrong with evidence based on torture. First, by the nature of the way in which it is received it is unreliable. We have very recent evidence—to which the noble and learned Lord, Lord Archer, referred—of the case of several British citizens who were profoundly tortured in Saudi Arabia and later admitted that they had agreed to all kinds of confessions of which they were not guilty for one moment.
	Secondly, it is a deeply humiliating and demeaning process. Anyone who considers the change in attitudes among the Muslim community to the UK and US coalition in Iraq, following the events at Abu Ghraib and Bagram, will understand how deeply there bites into a community a sense of anger and fury about torture. It adds strongly to a feeling that we are not living according to our own values.
	Thirdly, it seeps away at those very values. It begins to erode and destroy them. While I agree with the noble and learned Lord, Lord Archer, that at the present time we have a good record, it is also the case that in some areas that record is being vitiated by a growing ambiguity about what exactly is meant by subjecting people to torture.
	That brings me to my fourth point; namely, that we have taken great pride recently in the European Union, of which the United Kingdom is an active member, in gradually persuading Turkey to drop torture as a common weapon of criminal justice. The pride that we take in the way in which the European Union has steadily extended the culture and belief in human rights is vitiated every time that we ourselves become ambiguous and uncertain about where we actually stand.
	That brings me to my fifth point. A week ago the Home Secretary was in Washington discussing counter terrorism legislation. It is a matter of sadness to me that so often our Prime Minister identifies only with the Administration and not with some of the finest American traditions of belief in a rule of law and human rights. As many noble Lords will know, the Senate voted by 90 to nine, including 46 Republican senators, that there should in future be no demeaning or disgraceful system of punishment against anyone held in United States custody. That gives us a huge opportunity to redefine the limits and the guidelines of how we should behave.
	I turn finally to the two areas of profound ambiguity. The first of those concerns rendition, and I have to ask the Minister a direct question. Has the United Kingdom at any point taken part in the practice of rendition—under which one knowingly returns somebody to a country which is known to use torture as a method of state in order to receive their evidence, while being able to wash one's hands, like Pilate, of any responsibility for what has happened? Sweden sent two returned detainees back to Egypt on assurances given by the Egyptian government. Those assurances were broken within a matter of months.
	The second area of ambiguity I want to refer to is comprehended partly by what the noble Baroness, Lady Park of Monmouth, has already movingly said about deportations. It is simply appalling that we are now consistently sending people back knowingly to countries that practise torture and persecution—presumably for the reason of saving a bit of public expenditure—even when we could have rescued those people for a time from any fate of that kind. Then, in that association, there is the return of people to countries that promise or give diplomatic assurances that those people will not be tortured. Those diplomatic assurances are virtually worthless.
	That brings me to my final question. If Her Majesty's Government accept diplomatic assurances from countries such as Jordan, Egypt or Saudi Arabia about the way in which returned detainees will be treated, may we ask what steps are being taken to ensure that those assurances are inspected, monitored and upheld? Has Her Majesty's Government given any thought to the possibility of bodies such as the Red Cross or Red Crescent being involved in an independent inspection, or whether the promises are worth the paper that they are written on?

The Lord Bishop of Oxford: My Lords, I, too, am grateful to the noble Baroness, Lady D'Souza, for initiating this debate on such a crucial subject. Like some other of your Lordships, my particular concern has arisen from the Government's decision to deal with the problem of deporting foreign nationals who are suspected of involvement in terrorism by securing diplomatic assurances from nations that are known to practise torture. On 20 July the Home Secretary announced that agreement had been reached in principle with Jordan, and it is believed that similar understandings are being negotiated with Algeria and Egypt, amongst others. All three countries have ratified the convention, but all are known to practice torture—as is demonstrated in the recent findings of Amnesty, Human Rights Watch and the US State Department.
	The convention is absolutely clear. Article 3 says,
	"No State Party shall expel, return . . . or extradite a person to another State where there are substantial grounds for believing that he would be in danger of being subjected to torture".
	The rule is unqualified, and supported by Article 3 of the European Convention on Human Rights and Article 7 of the International Covenant on Civil and Political Rights.
	As the noble Baroness, Lady Williams of Crosby, also stressed, there is widespread agreement among international lawyers and human rights observers that diplomatic assurances provide no effective safeguard against the torture or degradation of those who are returned. The very fact that assurances are sought demonstrated that a risk is recognised to exist, and that there are no adequate means of monitoring or enforcing the assurances that may be given. There is also a track record of a failure to comply. For example, in May 2005 the Swedish government was found to be in breach of its Article 3 obligations when it relied on diplomatic assurances from the Egyptian government about an asylum seeker who was returned and subsequently tortured. It is worrying that the 2005 memorandum of agreement between the UK and Jordan provides no mechanism for enforcement where either government renege on their obligations.
	In addition, serious doubts exist about the viability of monitoring arrangements. The UK-Jordan memorandum provides that anyone arrested, detained or imprisoned within three years of being returned will be entitled to prompt and regular visits from a representative of an independent body nominated jointly by the two governments. However, the international committee of the Red Cross has refused to act as a monitor in Egypt, because it regarded access arrangements as unsatisfactory. Recently, both Amnesty and the Egyptian national council for human rights have refused to work with the British Government.
	The Government argue that other governments can be trusted to honour diplomatic assurances. In the light of past behaviour, and the absence of adequate monitoring and enforcement procedures, this sounds very hollow indeed. Professor Robert Goldman, the UN independent expert on the protection of human rights and fundamental freedoms while countering terrorism, Professor Manfred Nowak, the UN special rapporteur on torture, and Alvaro Gil-Robles, the Council of Europe's commissioner for human rights, all maintain that such assurances cannot be relied upon to secure protection from torture and ill-treatment. The Government really need to provide more convincing arguments than they have so far adduced for disagreeing with these weighty judgments.

Lord Judd: My Lords, the Foreign and Commonwealth Office put it very well in their annual report on human rights this year. It said:
	"Torture is one of the worst human rights abuses. As torture is outlawed under general international law as well as specific human rights treaties, when governments condone it, they risk losing their legitimacy and provoking terrorism".
	Torture brutalises those who practice it, morally corrupts those who control or permit it, and contaminates those who directly or indirectly condone it. Furthermore, as has been argued, the unreliability of so-called information gained by torture has been repeatedly demonstrated.
	Civilisation is fragile. When it is endangered all our efforts should be redoubled to protect the values and conduct which are its substance. The struggle is about hearts and minds. We must refuse to be diverted. Those who claim to be on our side but practice torture are not just wrong but guilty of treachery. They aid and abet the forces we seek to overcome. They give succour to those who want to win new recruits for extremist action. To prevail, civilisation demands a constant commitment to principles based upon respect for the dignity and integrity of people everywhere. Torture is itself terrorism. Terrorism will never be defeated by the deployment of terrorism in any form.
	The Joint Committee on Human Rights, of which I am a member, is embarking on an enquiry into UK performance against the requirements of the United Nations Convention. This will have to cover two things, amongst others. First, the returning of people to countries where there is a danger of their being tortured. As the noble Baroness, Lady Park of Monmouth, has pointed out, Article 3 of the UN Convention is quite specific.
	"No State Party shall expel, return . . . or extradite a person to another State where there are substantial grounds for believing that he would be in danger of being subjected to torture".
	The Government have been doing a great deal to secure formal agreements with some likely destination countries that anybody returned will not be tortured. As has been argued, the question arises as to why such an agreement is necessary. It is, of course, because the danger exists. But if it does, and torture is endemic to the system of such countries, how much confidence can there be that any agreement will be honoured?
	It is not at all reassuring to read in the text of the agreement with Jordan that,
	"A returned person who is arrested or detained will be brought promptly before a judge or other officer authorised by law to exercise judicial power in order that the lawfulness of his detention may be decided".
	What precisely, in the event, might "other officer" mean?
	Secondly, there is the use of material in the proceedings of SIAC, or indeed elsewhere, of information which had been secured under torture. The Government clearly have a responsibility to establish, beyond doubt, whether torture has been used. SIAC has accepted that as long as no British agent has been involved it can be used, even if it has to be regarded with caution. The appeal court has upheld this position. The argument seems to rest on the principle that UNCAT has not yet been incorporated into British law; and also that SIAC is claimed to be more in the realm of civil than criminal law. The matter is now before the Law Lords, and their ruling will be very important in this respect.
	Meanwhile, Article 15 of UNCAT remains clear.
	"Each State Party shall ensure that any statement which is established to have been made as a result of torture shall not be invoked as evidence in any proceedings, except against a person accused of torture as evidence that the statement was made".
	At a time when the paramount importance of the international rule of law could not be more obvious, it is surely essential that not just the letter but the spirit of conventions to which we are a party should be observed. Otherwise, the credibility of international law is seriously damaged, and that is counterproductive in the battle for hearts and minds. If we do not intend to abide by conventions or treaties, we should not enter into them. There is a great deal at stake for the future of the global community.
	The noble Baroness, Lady D'Souza, is warmly to be thanked for having brought this critically significant issue before the House today. We must be vigilant, as self-generating erosion of the values that we seek to defend could all too easily become a dangerous avalanche.

Lord Lester of Herne Hill: My Lords, in the wake of the London bombings, the Prime Minister said:
	"Let no one be in any doubt that the rules of the game are changing".
	By that, he apparently meant that the rules within international human rights law, including the UN Convention Against Torture and the Human Rights Act, need changing. That impression was sadly strengthened when the Lord Chancellor appeared to warn British judges that they might have to be instructed by Act of Parliament on how to interpret and apply the prohibition against torture in Article 3 of the convention more restrictively than the Grand Chamber of the European Court had done in the Chahal case, by giving greater weight to national security.
	What the Prime Minister finds objectionable in the court's ruling is that even if someone is a threat to national security he must not be deported to a country where there is a substantial risk that he will be subjected to torture. That ruling, as has been said, is reinforced by Article 3 of the UN Convention Against Torture. Mr Blair said:
	"We may have to amend the law to get it done".
	In my view, it is quite inconceivable that the Strasbourg court or the English courts would now interpret Article 3 more narrowly, or would overlook the binding obligations in the Convention Against Torture. That is confirmed by the magnificent recent unanimous judgment of the Supreme Court of New Zealand, which rejected the obnoxious balancing test. The Government's intervention in a pending Dutch case before the European court to try to reverse or limit Chahal is an exercise in forensic futility, which in my view is doomed to failure.
	There is of course a dilemma that no one else has yet mentioned, and which human rights NGOs need to face up to. What is to be done with a really evil, dangerous, subversive person who cannot be tried in this country, and about whom there are reasonable grounds for suspecting that they are a threat to national security, and where they are alleged to have committed serious crimes in a most unpleasant country that has a record of torture? What is to be done with such a person? If such a person remains here, they are to remain under house arrest, or indefinite detention, or something else of that kind. If they are sent to that country, they will face torture.
	For that reason, I commend the Home Secretary for seeking binding international agreements, as we do with the United States in respect of the death penalty, provided that those international agreements contain specific assurances, in clear terms, with strong and continuing independent monitoring, as has been said by other noble Lords. If that can be achieved, as it has been in the United States with local state prosecutors in respect of the death penalty, in principle the courts, looking at the facts of each case independently, would give full faith and credit to agreements of that kind. The problem is whether one can really negotiate a memorandum of understanding with safeguards.
	Finally, I hope that the Law Lords will soon decide that the Convention Against Torture can be interpreted and applied as though it had been incorporated by legislation in this country to forbid the use in British courts of evidence tainted by torture abroad. I also hope—this may seem ludicrous—that the Government will decide eventually to incorporate the UN Convention Against Torture and the International Covenant on Civil and Political Rights, as have done the other major countries of the European Union and the Council of Europe, into our domestic law, so that our judges do not have to seek to fill the gap by some creative judicial lawmaking.

Baroness Murphy: My Lords, I join other noble Lords in thanking the noble Baroness, Lady D'Souza, for raising this important debate tonight. I hesitated in putting my name forward for the debate, since I am no expert in this matter. The issues I want to discuss may be rather obvious ones.
	I am moved to speak because as a young psychiatrist in the 1980s, I heard at first hand the stories of refugees tortured under the Pinochet regime in Chile; stories of horror that were etched on my dreams for months and will never be forgotten. Torture is not just a painful, frightening and degrading episode. The consequences last many years; the depression, fear, loss of self-worth and even more serious psychiatric consequences for victims often last lifelong. This has been so often said by the Medical Foundation for Torture Victims, whose work I want to praise. It has done so much valuable work to restore broken bodies and minds.
	In order to carry out torture, the perpetrators have to be trained to believe that the objects of their torture are less than human, not like us, unworthy to be treated as members of the human race. We know how frighteningly easy it is to create the conditions in which people feel like that about others. I have known good people—nurses—to do the most barbaric acts to patients under the right circumstances—or the wrong circumstances. I know how easy it is to slip down that slippery slope.
	I shall now address the reliability of the utilitarian arguments about the use of torture. Gisli Gudjonsson, the Professor of Forensic Psychology at the Institute of Psychiatry, has carried out extensive research in police interviewing in cases of false or disputed confessions in the UK. In over half the cases he reviewed, the psychological vulnerability of the person being interviewed led to a false confession—under ordinary police questioning rather than under coercive or oppressive interviewing. It is not only people with learning disabilities or who are frankly mentally ill who make false confessions. We know well that suggestible, impulsive and submissive people who would be considered psychologically robust will agree to all kinds of things put to them, even when the long-term implications for them could be catastrophic.
	How much more likely then is it that improper, oppressive questioning, and the threat or reality of torture, would produce evidence of no value whatever? It is not in doubt that that kind of evidence is frequently on offer from overseas sources. Even when evidence can be accepted, though unreliable, with other corroborating evidence, it really is never enough to justify the impact that it has on the perpetrators.
	I read earlier this year Professor Mirko Bagaric at the Deakin Law School defending the official use of torture, even of innocent individuals, in the face of possible terrorist acts if the information would save lives. Alan Dershowitz at Harvard has written very much in the same vein, although he says that he prefers judges and presidents to make the decision and that it should not be perpetrated by "low-level people". He suggests that sterilised needles under the nail could be acceptable—I am glad that he said they should be sterilised. That was written by him on websites pertaining to his department.
	The ends do not justify the means. We degrade our own humanity in the process of doing so. For that reason, I join with the noble Baroness, Lady D'Souza, and others who have spoken, in saying that we must not condone, under any circumstances, returning people to regimes where we know that they are likely to be tortured. Indeed, we should impress on our friends among the international community that we will not condone their torture either.

Baroness Kennedy of The Shaws: My Lords, next week our highest court will begin hearing one of the most important cases of our times. The judges in the House of Lords are to examine the issue of torture and are being asked to determine whether the Home Secretary can use as evidence material that may be the product of torture.
	The political pendulum has already swung to unimaginable places, but this is a place beyond imagining. While torture is universally condemned, here we are in the 21st century still debating the acceptability and usefulness of torture and its products in certain circumstances. We talk about ticking bombs, a hypothesis that is never grounded in any real case.
	I am always cautious about any form of national boastfulness but, as we thrash around in search of the values that lie at the heart of being British, one of the values we can feel proudest of is that it was here that institutional opposition to torture was first formulated. One of the distinguishing features of English common law from its earliest inception was its outright rejection of torture as a method of proof. It is one of the defining characteristics of our law. As such, it is a constitutional principle, and we should feel proud of it.
	In Felton's case in 1628, the judges made the position very clear, holding that evidence obtained by torture was inadmissible. They placed an absolute prohibition on torture and any use of the product of torture in the courts. Rendition, however—not new, I have to tell my friends—was a problem even then. Scotland continued to torture suspects and witnesses for 50 years after England. We used to send detainees up to Edinburgh for a bit of stretching on the rack. Happily, Scottish judges and the people of Scotland railed against the horror of what was happening, and Scotland became the first country to legislate against the use of torture, in the Treason Act 1709.
	The principled opposition to torture is deep in the bowels of the UK legal systems. The reason for the rule against torture and its products is the outrage to civilised values that torture necessarily involves. Once exceptions to the law prohibiting torture are created, those exceptions will be abused. Once you give legitimacy to torture, you open the space for more torture.
	Around the world, good men, sitting as judges, have stated the obvious. McNally, a judge in the Supreme Court of Zimbabwe, in the case of Nkomo in 1989, said:
	"It does not seem to me that one can condemn torture while making use of the confessions resulting from torture, because the effect is to encourage torture".
	Justice Barak, President of the Israeli Supreme Court, in that famous case in 1999 about torture and its use in Israel, condemned it:
	"By using torture or . . . the fruits of torture, the state weakens its case against terrorists, by adopting their methods, and it loses the moral high ground an open democratic society enjoys . . . Although a democracy must often fight with one hand tied behind its back, it nonetheless has the upper hand".
	Our signing of international conventions does not just impose a duty to refrain from torture, but creates an obligation to condemn and deter torture and to suppress all its manifestations, which means also using it for evidence in our courts, even if it is happening somewhere else. Our own Lord Justice Neuberger, dissenting in the Appeal Court judgment, said:
	"To admit evidence obtained by torture is implicitly to condone it",
	and it was also said by the human rights commissioner for the Council of Europe in his report in June this year.
	The Government's position, however, is that they refuse to rule out accepting evidence suspected of being obtained by torture, as long as our agents have not been involved in it. Even worse than that, the real rub is that we will not ask foreign intelligence sources the million-dollar question of whether torture was used to secure the information we are using in our courts. I understand that the policy is "don't ask, don't tell", and I would like to hear from the Minister whether indeed it is. If so, it is a pathetic and shameful avoidance of our moral responsibility. If we are able to say that we did not knowingly use torture, because we did not bother to ask, those are weasel words.
	If we really want to change our commitments, the Government will have to go to Parliament. If we want to use the fruits of torture as evidence, we should legislate to do so, and it should be for the democratically elected legislature, after full and informed debate, to spell out that purpose. I do not believe the people of Britain want us to connive in torture, and I hope Parliament would find it an absolutely disgraceful prospect. I find it hard to imagine it is a legacy of which Mr Blair would be proud.

Lord Avebury: My Lords, two themes have dominated this debate. First, the use of evidence obtained by torture, which is prohibited by the convention in all circumstances, whether in the form of confession or against third parties, and in non-criminal as well as in criminal proceedings. The Government must ensure that our law is brought into line with that principle if the Judicial Committee fails to do that next week. The distinction drawn by the Court of Appeal between SIAC and criminal proceedings is spurious, as the noble Lord, Lord Judd, points out, and it would be alarming if any courts were entitled to ignore the convention.
	If the Government win the case of "A" before the House of Lords, that is not the end of the matter. The JCHR will be reporting on the implementation of the convention by the UK. The case of "A" itself could go to Strasbourg, and the Committee Against Torture would review the position. The proposals to combat terrorism would come under even more hostile scrutiny in both Houses of Parliament.
	Secondly, there is the UK's reliance on diplomatic assurances that terror suspects sent back to countries such as Algeria would not be tortured there, in the absence of effective post-return monitoring arrangements and appropriate due-process guarantees, as mentioned by my noble friend Lady Williams. It is said the Government are considering a belt-and-braces approach of watering down the Human Rights Act, so that, whatever is said in Strasbourg about these matters, we can deport people to countries where they can be tortured. I would like to know from the noble and learned Lord the Lord Chancellor whether there is any intention to amend the Act.
	The right reverend Prelate has referred to the agreement with Jordan, that deportees we send back there should not be tortured,. This agreement provides for monitoring by the representative of an independent body to be agreed by the UK and Jordan. As he said, this has proved impossible in the case of Egypt, and it is unlikely that the task will be any easier in Jordan. If it does turn out to be possible to establish effective systems of monitoring in either country, however, there is still no effective remedy, as he pointed out, when the agreement is breached. All we can do is give six months' notice of termination of the agreement, with no mechanism for enforcement.
	It would be a serious error of judgment, of which we have been given due warning, if Britain were to deport people to Algeria, or indeed to any of the other countries that have been mentioned, unless and until arrangements are made for monitoring the agreement that are watertight and subject, I would propose, to approval from the special rapporteur on torture, or some similar international authority.
	Finally, the Committee does not agree with the opinion we expressed when giving evidence, that the convention did not apply in full to territory where our forces were in de facto control, as in Iraq and Afghanistan. They say we should publish the result of all investigations into alleged misconduct by members of our forces in both countries. It is particularly important, since we are there ostensibly to restore the human rights of Iraqis and Afghans, that we act promptly, transparently and in full conformity with human rights instruments that we have signed, when any allegations of misconduct come to our attention.

Lord Kingsland: My Lords, I, too, thank the noble Baroness, Lady D'Souza, and congratulate her on initiating the debate. I hope that the noble Baroness feels its high quality fully justifies her in taking the initiative.
	The noble and learned Lord, Lord Archer of Sandwell, encapsulated the issue most succinctly. He said that the problem is not that the United Kingdom Government practised torture or would ever entertain its practice on their territory or that over which they had control. As the noble Baroness, Lady Kennedy of The Shaws, pointed out, torture has been repugnant to the British tradition for centuries—thank heaven. The problem is rather, as the noble and learned Lord went on to say, whether the Government are turning their back on torture practised by others.
	Three main illustrations of the circumstances in which the Government might be doing just that have emerged from today's debate. The first was introduced by the noble Lord, Lord Judd, but elaborated on by the noble Baroness, Lady Kennedy of The Shaws. It is the acceptance in English legal procedure, in the context of SIAC hearings, of evidence from foreign intelligence sources which has been obtained by torture, provided that there had been no participation by a British agent. That matter will soon come before their Lordships' House, but I respectfully share the view expressed by the noble Baroness and the noble Lord, Lord Judd, in no uncertain terms. One hopes that such a practice will cease either by a decision of their Lordships' House or by the Government taking a different view on the matter.
	The second issue was graphically illustrated by my noble friend Lady Park of Monmouth; that concerns the circumstances in which asylum seekers are sent back to countries which are suspected of having, or are known to have, torture, among other methods, on their investigative agendas. I have been astonished that the Government have continued to allow the deportation of Zimbabwean nationals to Zimbabwe. There have, of course, been nationals of other countries similarly deported in circumstances where all the public evidence seemed to suggest a serious danger that they would be tortured. I hope that the noble and learned Lord will be able to comment on that.
	Finally, and perhaps most importantly, is the deportation of nationals, properly considered undesirable, on security-related lines. The dilemma was skilfully illustrated by the noble Lord, Lord Lester of Herne Hill, and others, such as the right reverend Prelate, have discussed the real dilemma the Government face in addressing this matter. Let us not disguise the fact that the Government have a serious problem here. We all earnestly hope that arrangements can be made which will fulfil the criteria suggested by the noble Lord, Lord Lester, and the right reverend Prelate; but if they cannot be, we must face up to the fact that under Article 3 of the convention we have obligations which are unqualified.
	Perhaps ultimately the best way of solving these problems is to have a definition of terrorism in our own country which will enable us to prosecute people in those circumstances and reduce the desirability of deportation to a minimum.

Lord Falconer of Thoroton: My Lords, it has been a powerful, effective and moving debate. I join every other speaker in congratulating the noble Baroness, Lady D'Souza, on securing it. I respect and revere the work she has done over a long time for the victims of torture. We as a Government, a state and a nation unreservedly condemn the use of torture. We continue to work with our international partners, including the United Nations and the Organisation for Security and Co-operation on Europe, to combat torture wherever and whenever it occurs.
	Torture is an affront to human dignity, a denial of the right to respect, which is the inalienable birthright of every human being. It is a crime which degrades the victim and debases and corrupts the torturer. It corrodes every political system in which it is used, substituting fear for trust and servility for dignity. It lasts for years and it damages the will and the coherence of any community in which it is practised. Any country which tortures and degrades offers values to the rest of the world which are completely unacceptable. There is no doubt, too, that terrorism can be dealt with while respecting human rights, including the right not to be tortured. We condemn it without ambiguity.
	We continue to oppose and condemn the use of torture all across the world. But we go a lot further than that. We are among the leaders of those taking practical action to secure its eradication worldwide. For example, in December 2003 we ratified the convention's optional protocol. The protocol seeks to establish an international preventive system of regular visits to places of detention in signatory states. We were the third country in the world to ratify the protocol, and in June 2004 we launched a worldwide campaign to encourage other countries to join us. We are pleased that 13 countries have now ratified the protocol. Twenty ratifications are needed to bring it into force, and we are hopeful that that will happen in 2006.
	The noble Baroness, Lady D'Souza, mentioned Section 134 of the Criminal Justice Act 1988—enacted at the time the United Kingdom ratified the convention—which makes it a criminal offence for a public official or person acting in an official capacity to commit torture or cruel, inhuman or degrading treatment or punishment, whatever his nationality and wherever in the world he commits the offence. The penalty for this offence is imprisonment for life. It does not, as I have said, restrict itself simply to this country. As the noble Baroness, Lady D'Souza, pointed out, the first prosecution under Section 134 was brought to a conclusion in July this year with the conviction of a former Afghan warlord in this country. My noble and learned friend the Attorney-General gave his consent to the prosecution. Again, we are leading the world. It is believed that this is the first time anywhere in the world that a foreign national has been tried on charges relating to torture of victims who are also foreign nationals. It was an historic development in the jurisprudence relating to torture, and one of which this country can justifiably be proud.
	The noble Baroness, Lady D'Souza, has also mentioned proceedings brought against UK servicemen. We will not tolerate improper treatment of persons held in detention by UK officials overseas. Where there are serious allegations of abuse by British forces against detainees, they are thoroughly investigated. Where evidence has been found, individuals have been prosecuted. For example, British servicemen accused of mistreatment of Iraqi civilians at a humanitarian aid distribution centre near Basra in May 2003 were tried and convicted by court martial in February.
	The noble Baroness, Lady D'Souza, asked why prosecution was not brought under Section 134. That was a decision of the Army Prosecuting Authority in consultation with my noble and learned friend the Attorney-General. There was no doubt about the extent to which we deprecated what had happened, and proceedings were brought.
	As the noble Lord, Lord Kingsland, rightly identifies, there are dilemmas that any country faces, and the first issue that we have to address is that of how we deal with terrorism of an international sort. Like all governments, we are faced with difficult practical decisions in which we need to balance the rights of our citizens and the rights of citizens of other countries under the most intense pressure to protect public safety and national security. In facing the dangers posed by international terrorism we have to ensure that those charged with protecting our security have all the tools they legitimately require: legal powers, and human and other resources. In adapting our legal tools to face new threats, we will ensure that we do so in a way that reflects our values of democracy and tolerance, and ensures our continued support for the rule of law, including our obligations under the convention and other treaties that guarantee human rights.
	It is vital that we act against those who threaten our national security. The Home Secretary—as the noble Lord, Lord Avebury, said—has decided to deport 23 detainees on grounds of national security. Each is being detained pending the making of a deportation order and the outcome of any appeal. The detainees have a right of appeal to the Special Immigration Appeals Commission. We will not deport people unless we are in a position to satisfy the courts that their removal would be consistent with the United Kingdom's international obligations. The Government would not extradite a person where there is a real risk of the death penalty being imposed. Similarly, we would not remove a person under immigration powers in the knowledge that this would lead to treatment contrary to Article 3.
	We are determined, however, to pursue deportation action against those who have no right to remain in the United Kingdom, while ensuring full compliance with our international obligations. Where necessary, our approach includes entering into discussions with foreign governments in order to ensure the proper treatment of those who are deported. Noble Lords have rightly referred—including the noble Lord, Lord Judd, the right reverend Prelate the Bishop of Oxford and the noble Lords, Lord Avebury and Lord Lester of Herne Hill—to the fact that memorandums of understanding are being sought with certain countries to which deportations are contemplated. It will be for the Special Immigration Appeals Commission to determine whether those memorandums of understanding give sufficient protection to the relevant deportees. We should trust our courts to address these issues in a sensible way in accordance with the terms of Article 3.
	I also submit that noble Lords should not deprecate seeking these memorandums of understanding, because they could provide protection and improve the human rights conduct of those countries with which they are made. We should not be in any way embarrassed in seeking those memorandums of understanding, and people should not say that they are ineffective until they have seen what they say.
	On the interpretation of Article 3 of the European Convention on Human Rights, prior to the judgment of Chahal v United Kingdom, to which the noble Lord, Lord Lester, referred, the European Court of Human Rights had already established that Article 3 prevented extradition or removal where there were substantial grounds for believing that the person would face a real risk of being subjected to torture or inhuman or degrading treatment or punishment in the receiving state.
	However, passages in the court's earlier judgment in Soering v United Kingdom referred to the "fair balance" to be struck between individual rights and the interests of the wider community. Soering was decided seven years earlier in 1989. Soering was not itself concerned with national security. However, these passages were relied on by the United Kingdom in Chahal to argue that Article 3 did not prevent expulsion where this was required on national security grounds. This argument was also supported by the exceptions in Articles 32 and 33 of the refugee convention.
	The court in Chahal rejected this argument by a majority of 12 to 7. The dissenting judges held that the removing state was entitled to strike a fair balance between the nature of the threat to national security and the potential risk of ill-treatment in the receiving state. We think that the view of the minority was the right one, but I make it clear that we accept whatever conclusion is reached in relation to Article 3.
	The second issue rightly identified by the noble Lord, Lord Kingsland, is the use of torture evidence in relation to court proceedings in this country. I make it clear that we would never use torture evidence in relation to criminal proceedings. As noble Lords have rightly identified, the problem arises in respect of SIAC. The dilemma that faces countries is what happens when intelligence is received on which they act, and that act could then be subject to judicial review. Are they entitled to put before the court all the material they have relied on? In many cases, although my noble friend Lady Kennedy of The Shaws says that the ticking time bomb never arises, there will be occasions when there is a legitimate threat identified by a foreign intelligence where the precise source is not known. Should the country act in relation to it? In many circumstances I think they must.
	I make it clear that in the case of A, which is going to the House of Lords next week, the Court of Appeal found that there was no evidence that the material relied on had been obtained as a result of torture, but it addressed the issue. The difficulty for any state is whether it should sit by and ignore the evidence it has. That is the dilemma, and that is the dilemma which the House of Lords will address next week. It is the dilemma which the Court of Appeal decided by a majority of two to one that it could understand; that, given material where there was a threat that people might be killed or maimed, they would have to act in relation to it.
	It is an incredibly difficult dilemma. Noble Lords should be sympathetic to the problems of a government who are not remotely involved in torture itself but feel an obligation to protect people from being tortured.

Baroness Kennedy of The Shaws: My Lords—

Lord Falconer of Thoroton: My Lords, perhaps I may not accept an intervention; I have only 10 minutes.
	The noble Baroness, Lady D'Souza, raised the issue of extraordinary rendition, as did the noble Baroness, Lady Williams of Crosby. I have no knowledge—and I have asked—that we have ever been involved in either rendition of the sort to which the noble Baroness referred, or extraordinary rendition. The noble Baroness, Lady D'Souza, raised the issue of other countries refuelling in this country and then going on and something happening on the plane. We do not know of that. We have signed the Chicago convention that allows refuelling stops without a requirement for the country to say what is going on in that particular plane. I cannot give an assurance as to what is going on, but that is the nature of the aviation convention we have signed. I cannot take the matter any further than that.
	We share the views of the noble Baronesses, Lady D'Souza and Lady Park, of the government of Zimbabwe. Their human rights record is appalling, and there are Zimbabweans who need, and must receive, protection through the asylum process. As we have regularly made clear, we assess each case on its individual merits. All those who meet the definition of a refugee under the 1951 Geneva Convention are granted asylum. In addition, those whose removal would be a breach of their rights under the European Convention on Human Rights will also be granted protection.
	The issue of how failed asylum seekers are treated on return to Zimbabwe was considered in depth by the Asylum and Immigration Tribunal last week. We do not know what the answer is, but we have a court system that looks at precisely the issues the noble Baroness has rightly raised. We must depend on our court system to address the issues and reach fair conclusions.
	I have not dealt with every issue, but I have dealt with the main ones. On the point raised by my noble and learned friend Lord Archer, my understanding is that signing the state immunity treaty has not changed the position on torture, but I recognise that he takes a different view on it. I also fully accept his point that there should be a proper debate before ratification occurs. He rightly says that I am not in a position to give him any guarantee about when such a debate might take place, but I support his view that it should be debated.
	The noble Baroness, Lady Kennedy of The Shaws, referred to the fact that in 1709 by the passage of the Treason Act the United Kingdom—albeit Scotland—became the first European state to abolish torture as a legal means of criminal inquiry. We are as opposed to the use of torture now as our enlightened and pioneering forebears were then. Our condemnation of the use of torture is unequivocal and our pursuit of the worldwide abolition of torture remains steadfast, as does our support for the United Nations and the Convention against Torture. In difficult times and in the most challenging circumstances we will continue to uphold the example that the United Kingdom has set to the rest of the world for nearly 300 years.

Charities Bill [HL]

Consideration of amendments on Report resumed.

Lord Bassam of Brighton: moved Amendment No. 37:
	Page 9, line 33, leave out from "the" to second "to" and insert "Commission and the Attorney General are to be treated as parties"

Lord Bassam of Brighton: My Lords, I can be brief. As the Bill stands, any party to particular proceedings before the tribunal has a right to appeal to the High Court against the decision of the tribunal in those proceedings. In addition, the Bill gives the Attorney-General the right to appeal the tribunal's decision to the High Court where he has not been party to the proceedings.
	We believe in that respect that the Charity Commission should have identical rights of appeal to those that the Attorney-General has, and that is what this amendment achieves. I beg to move.

On Question, amendment agreed to.

Lord Bassam of Brighton: moved Amendment No. 38:
	Page 9, line 36, leave out ", and is not, to be treated as" and insert "to be treated as being (or not being)"

Lord Bassam of Brighton: My Lords, this is again a minor drafting amendment suggested by the parliamentary draftsman. Its effect is to move "treated" to a more suitable position in the sentence. I am advised that the amendment has no substantive effect. I beg to move.

On Question, amendment agreed to.
	[Amendment No. 39 not moved.]

Lord Bassam of Brighton: moved Amendment No. 40:
	Page 10, line 14, leave out "Schedule 1C" and insert "Schedules 1C and 1D"
	On Question, amendment agreed to.

Lord Swinfen: moved Amendment No. 41:
	After Clause 8, insert the following new clause—
	;CHAPTER 2A THE CHARITY INDEPENDENT COMPLAINTS REVIEWER
	THE CHARITY INDEPENDENT COMPLAINTS REVIEWER
	After section 2 of the 1993 Act insert—
	"THE CHARITY INDEPENDENT COMPLAINTS REVIEWER
	2A THE CHARITY INDEPENDENT COMPLAINTS REVIEWER
	(1) There shall be a complaints reviewer to be known as the Charity Independent Complaints Reviewer (in this Act referred to as "the Reviewer").
	(2) The function of the Reviewer will be to investigate—
	(a) complaints of maladministration and of failure in quality of service by the Charity Commission, and
	(b) complaints of unfair, unreasonable or disproportionate behaviour by the Charity Commission.
	(3) The Reviewer shall be appointed by the Secretary of State.
	(4) A complaint may be made to the Reviewer by or on behalf of any charity, charity trustee or other person or body who is or may be affected by the actions or decisions of the Charity Commission and there shall be no requirement that a complainant must use the courts or Charity Commission's own complaints procedures first.
	(5) The Reviewer will not have authority to investigate and adjudicate—
	(a) complaints about the substance of legal decisions made by the Commission, although complaints about the way in which those decisions were made will be within the Reviewer's remit,
	(b) complaints by Commission employees concerning their employment or by applicants for employment about recruitment procedures,
	(c) complaints where legal proceedings directly relating to the substance of the complaint have been initiated,
	(d) complaints relating to matters which are under current investigation by the police or taxation authorities, and
	(e) complaints under current investigation or which have earlier been the subject of a report by the Ombudsman, but complaints which the Ombudsman has refused to consider may be reviewed.
	(6) The Commission shall co-operate with the Reviewer by permitting the Reviewer—
	(a) to inspect and take copies of all documents (including documents in electronic form) held by the Commission which the Reviewer considers relevant to the complaint, and
	(b) to interview employees or agents of the Commission.
	(7) The charity, the charity trustees and any receiver and manager appointed for the Charity shall also co-operate with the Reviewer by permitting the Reviewer—
	(a) to inspect and take copies of all documents (including documents in electronic form) held by it, him or them which the Reviewer considers relevant to the complaint,
	(b) to interview the charity trustees, the receiver and manager, their employees and agents and the employees and agents of the charity.
	(8) The Reviewer may—
	(a) send or not send any draft report to the Commission and the complainant but shall not send it to only one of them,
	(b) dismiss a complaint,
	(c) make a finding that the complainant has acted frivolously, vexatiously or unreasonably,
	(d) require a complainant against whom such a finding has been made to pay the whole or part of the costs of the investigation,
	(e) make recommendations to the Commission regarding the manner in which it discharges its functions, or
	(f) make a finding of maladministration against the Commission.
	(9) In cases where the Reviewer has made a finding of maladministration against the Commission, he may—
	(a) require the Commission to apologise to the complainant, and/or
	(b) make an award of compensation against the Commission, or
	(c) make no award.
	(10) The Reviewer shall report annually in writing to the Secretary of State and may publish reports on individual cases unless he considers that there are good reasons not to do so.
	(11) The expenses of the Reviewer will be paid from moneys provided by the Parliament.""

Lord Swinfen: My Lords, the purpose of this amendment is to set on a statutory footing the existing Independent Complaints Reviewer who at present is appointed by the Charity Commission, with the following significant alterations to the current arrangements: first, to give the reviewer the power to award compensation for financial loss arising from Charity Commission conduct in addition to small, consolatory payments for maladministration on the part of the commission; and secondly, to minimise delay in accessing the reviewer by not requiring that the complainant use the Charity Commission's internal complaints procedure first.
	Together, these changes should bring about a genuinely independent statutory alternative dispute resolution procedure and provide a more rapid resolution of problems arising from complaints about the commission maladministration that is likely to be available through complaints to the parliamentary ombudsman and the High Court, although these two routes will remain available to complainants, as at present.
	This amendment would create a truly independent mechanism for charities, trustees and others to challenge the Charity Commission when it is apparently guilty of maladministration or acting unfairly, unreasonably and disproportionately, and to obtain financial compensation for maladministration and financial loss. The Government have previously shown themselves unwilling to allow that role for the new tribunal and have turned their back on arbitration.
	In my submission in support of a similar amendment in Committee on 28 June, I made the following points, as reported at col. 217 of the report of our proceedings. The first was that, at present, the Independent Complaints Reviewer is a creature of the commission, whose findings and recommendations it can ignore if it so chooses. The second was that the Independent Complaints Reviewer cannot recommend payments for compensation where a charity has suffered real financial loss as a result of the commission's conduct, beyond small consolatory payments. My third point was that access to the ombudsman is restricted to cases submitted by a Member of Parliament, and the ombudsman routinely refuses to investigate cases where there is a possibility of High Court redress. High Court appeals are ruinously expensive for charities and trustees, which have no recourse to legal aid and commonly find themselves up against the Attorney-General and the Treasury solicitor—who has the total backing of the Treasury behind it—which acts for the Charity Commission. Appeals to the High Court require either a certificate from the commission to bring proceedings, or an application to the High Court to bring such proceedings, if the commission refuses its certificate.
	Do such arrangements make for easy access to justice? I doubt it. In answer to my amendment in Committee, the Minister drew a comparison between access to the ombudsman and access to the Independent Complaints Reviewer. He concluded that, on the whole, the ombudsman route was advantageous. I do not doubt that it is, but it is not readily available to charities in practice.
	In the same debate, the noble Lord, Lord Phillips, said that,
	"the present arrangements are highly defective, especially with the Parliamentary Ombudsman's inability to intervene unless High Court remedies have been exhausted".—[Official Report, 28/6/05; col. 221.]
	In summarising his argument, the Minister said that the present arrangements worked well—perhaps he meant that they worked well for the Charity Commission. When challenged on the issue by the noble Lord, Lord Phillips, the Minister speculated that a statutory independent complaints reviewer might also want to wait, like the ombudsman, until all legal processes were exhausted first. I see no reason why an ICR might behave in that way, but I have made it my earlier proposal to prevent that. I beg to move.

Lord Phillips of Sudbury: My Lords, I am sure that we are all grateful to the noble Lord, Lord Swinfen, for plugging away at this, because there certainly is a problem. My view of how to deal with it has been altered as a result of speaking with the Parliamentary Ombudsman—I have done so twice since Committee—and discovering that what I said on the previous occasion is not as true as I thought; that is to say, the notion that I harboured that the Parliamentary Ombudsman would not get involved unless High Court remedies have been exhausted is not correct. There is no need, in order for the Parliamentary Ombudsman to be engaged, for legal remedies through the courts to be pursued. However, if legal action has been commenced, the Parliamentary Ombudsman will not intervene while they are on foot.
	The other inhibition to a remedy—to get to the parliamentary ombudsman, who is the only person who can grant what I would call proper compensation—is that one has to go to an MP. I am told that that is not a problem in practice. It occurred to me when having conversations with both Ann Abraham, the ombudsman, and with the Independent Complaints Reviewer, that there is far too little understanding within the sector about the availability of access to the commissioner when a charity wants real compensation rather than a modest conciliatory reward. We need to broadcast the availability of the parliamentary ombudsman.
	It is for those reasons that I am inclined to think that the creation of a new piece of legislative machinery to create a specific ombudsman for the sector might be premature. I feel that the sector should get its own act together and realise the prospects that there are via the parliamentary ombudsman. We should give that a go before proliferating a further bespoke ombudsperson. I hope that I do not disappoint the noble Lord, Lord Swinfen, too much if I do not support him at this stage.

Lord Bassam of Brighton: My Lords, I congratulate the noble Lord, Lord Swinfen, on persisting in this. We remain of the view that there is already a statutory body that can investigate complaints of maladministration—the ombudsman. As I said last time, we believe that the ombudsman has many advantages over the Independent Complaints Reviewer, which I shall repeat.
	In terms of independence and accountability the ombudsman is appointed by the Queen on the recommendation of the Prime Minister and reports directly to Parliament, as opposed to an appointment by and reporting to the Secretary of State, which is envisaged in the amendment.
	An apology from the commission may be more valued if it stems from a recommendation of the ombudsman rather than the commission being required to make one via a statutory complaints reviewer.
	Finally, and perhaps most importantly, the ombudsman can recommend any level of redress if the complainant has evidence to show that he or she has experienced quantifiable financial loss directly as a result of the commission's maladministration. If the commission chose to ignore a recommendation of the ombudsman to provide compensation, the ombudsman would refer the commission to the Select Committee on Public Administration. The ombudsman makes recommendations for substantial redress. Today, the ombudsman has published a report recommending financial redress of £100,000 for complainants against the Department of Transport. That is a substantial sum.
	A point has been made that the ombudsman will not get involved in cases where the complainant has recourse through the courts. It is important to separate out maladministration from the legal decisions of the commission. Understandably, legal decisions are not within the ombudsman's remit as there is a route of appeal for those through the courts. That access will be wider through the Charity Appeal Tribunal. However, the ombudsman could look at any maladministration of the commission even in a case that had been decided by a court or a tribunal on a point of law. That point was made very effectively by the noble Lord, Lord Phillips, following his conversations.
	The present non-statutory Independent Complaints Reviewer, Jodi Berg, published her annual report for 2004–05 last month. During that year she conducted 18 reviews covering 110 individual allegations of maladministration against the commission, of which 14 per cent were fully or partially upheld and 86 per cent were not upheld. She acknowledges the significant progress that the commission has made over recent years in improving its services and complaints handling procedures. She also reflects on the need for a statutory independent complaints reviewer and believes that her role is complementary to that of the ombudsman, without seeking to replace the authority or the independence of that office, which is derived directly from Parliament. She states that,
	"It is doubtful whether a potentially overlapping office would add anything for the citizen other than confusion . . . During my time as ICR for the Charity Commission, recommendations have resulted in substantial changes to the way in which the Commission carries out its regulatory role, providing greater clarity and consistency of approach".
	So—there is progress.
	We continue to believe that the current arrangements with a non-statutory independent complaints reviewer, backed by the parliamentary ombudsman, provide, on balance, the right approach to the problems that can be incurred or encountered. Having heard that, I hope that the noble Lord, Lord Swinfen, will finally give up on this issue. But that is entirely up to him.

Lord Swinfen: My Lords, I never say finally. One should never admit to giving up anything. The noble Lord, Lord Phillips, said that he thought that this was rather premature, but I wonder. Earlier today the noble Lord, Lord Bassam, said that when this Bill becomes an Act it will be reviewed in five years' time. It will take another five years for another Bill to correct any deficiencies comes before Parliament. That is at least 10 years, but very likely to be longer. So I am not so sure that it is premature. However, I will read carefully what both noble Lords have said and reserve my position on whether I come back with a similar amendment at Third Reading. In that case, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	Schedule 3 [The Charity Appeal Tribunal]:

Lord Bassam of Brighton: moved Amendments Nos. 42 to 45:
	Page 85, line 5, leave out "Appeal"
	Page 85, line 10, leave out "Appeal"
	Page 85, line 14, leave out "Appeal"
	Page 85, line 18, column 2, leave out "Appeal"
	On Question, amendments agreed to.
	Schedule 4 [Appeals and applications to Charity Appeal Tribunal]:

Lord Hodgson of Astley Abbotts: moved Amendment No. 46:
	Page 85, line 29, leave out from beginning to end of line 11 of page 86 and insert—
	"1 (1) Except in the case of a reviewable matter as set out in paragraph 3, an appeal may be brought to the Tribunal against any decision, direction or order made or given by the Commission under this Act (including any decision not to give a direction, make an order or otherwise act under this Act).
	(2) Such an appeal may be brought by—
	(a) the Attorney General;
	(b) any person from the following—
	(i) the persons who are or claim to be the charity trustees of the institution or who otherwise have control or management of the institution,
	(ii) (if a body corporate) the institution itself, and
	(iii) any other person who is or may be affected by the decision, direction or order (as the case may be).
	(3) In determining such an appeal the Tribunal—
	(a) shall consider afresh the decision, direction or order appealed against, and
	(b) may take into account evidence which was not available to the Commission.
	(4) The Tribunal may—
	(a) dismiss the appeal, or
	(b) if it allows the appeal, exercise any of the following powers—
	(i) quash the decision, direction or order (as the case may be) in whole or in part, and (if appropriate) remit the matter to the Commission,
	(ii) substitute for all or part of the decision, direction or order (as the case may be) such other decision, direction or order as could have been made or given by the Commission,
	(iii) give such direction to the Commission as it shall consider appropriate,
	(iv) substitute for all or part of any direction or order any other direction or order which could have been made by the Commission,
	(v) add to the decision, direction, or order (as the case may be) anything which could have been contained in the original decision, direction or order."

Lord Hodgson of Astley Abbotts: My Lords, I am sorry that we have to return to another slightly old chestnut, but this is the relevance of the extremely extensive list given in Schedule 4. Noble Lords will remember that this is a long—six pages, in fact—list of what may form the basis of an appeal to what is now called the Charity Tribunal. When we were last in Committee on 28 June, I argued that an attempt to provide an exhaustive (not to say exhausting) list of what could form the basis of an appeal was bound to end in failure; gaps were bound to appear. I gave two such examples that had already been brought to my attention. I went on to argue that surely it was better, and simpler, to say that anything was appealable.
	The Minister argued that it was better to ask people to wade through six pages of densely packed prose, which listed all of the events that were appealable, to see if their case fitted the Bill. I am sorry to disappoint him and say that I cannot see the logic of that approach. The Minister went on to argue that, in any case, the Bill, as presently drafted, gave the power for events, which it later became apparent should properly be appealable, to be added to the schedule in the future. That, in my view, is a clear case of locking stable doors after horses have bolted. It is a shame to set out with a particular weakness in mind.
	As I said, I gave two examples, which I considered should be appealable but which were not in the list in Schedule 4 as presently drafted. The Minister, with his infinite politeness, rejected them both. But I would ask him to reconsider the Government's overall position and the approach that they have adopted. My first example was Section 29 of the 1993 Act which is about power to give advice and guidance. The Minister argued that,
	"it is not appropriate to appeal to tribunal. The commission would give authority, if appropriate, for directions to be given by the court".—[Official Report, 28/6/05; col. 228.]
	On reflection, I accept the force of that argument. However, my further thought relates to the Minister's words,
	"directions to be given by the court".
	I thought that that was exactly what the Bill strategically was trying to avoid—to reduce the dependence of the charitable sector on the elaborate, time-consuming, adversarial and expensive legal system.
	My other example has stood the test of time rather better. Section 33 of the 1993 Act concerns the taking of charity proceedings. A refusal to undertake such proceedings, apparently, is not appealable, according to the list given in Schedule 4. Again, the Minister replied that this matter,
	"is already, in any event, subject to review by the court".—[Official Report, 28/6/05; col. 228.]
	Why does he seek to drag the legal system back into charity administration, when the Government's approach all along has been to try to keep it out? If his argument tonight is to be that a review by the court will take no longer than a review by the tribunal, that gives me some serious doubts about the fundamental purpose of that latter body. We are expecting it to act faster and to react in a way in which the courts are unable.
	To date we have one and a half gaps in the schedule and the Bill is yet to reach the statute book. What will tomorrow bring? On the previous occasion when we discussed this, the noble Lord, Lord Phillips, in kindly supporting the amendment—tonight he may have changed his mind—said that the Government's approach was "counter intuitive". That is a splendid phrase, on which, as often happens with what the noble Lord says, I cannot improve. I beg to move.

Baroness Gibson of Market Rasen: My Lords, if Amendment No. 46 is agreed to, I cannot call Amendment No. 47 because of pre-emption.

Lord Bassam of Brighton: My Lords, I shall have to disappoint the noble Lord. We remain of the view that setting out details of the appeal rights, eligible appellants, and tribunal powers in the way we have done in the table in Schedule 4 is clear and easy to understand, and is the right approach. In addition, we would not usually expect the lay person to refer directly to the legislation for details of appeal rights. Rather, we would expect the commission to provide details of rights of appeal in a leaflet or guidance document designed specifically for charity trustees and the lay person, rather than charity lawyers and other professionals who may be more practised at referring to the legislation directly.
	One of the concerns that has been mentioned is whether we have missed any particular provisions in this table. We have given the table very careful consideration, but we also have the power for the Secretary of State to amend the table, subject to the affirmative resolution procedure. This provides the flexibility to add, remove, or amend appeal rights. If Members of your Lordships' House want to draw attention to any particular omissions, we would be very happy to consider those for inclusion.
	We do not agree that the tribunal's remit should extend to circumstances where the commission has not made a decision, direction, or order or has unreasonably delayed making a decision. These are matters of maladministration rather than legal decisions, and we believe that the correct process in such circumstances is through the commission's own complaints procedure, the Independent Complaints Reviewer, and ultimately, of course, the ombudsman. A further practical difficulty would arise if we were to extend the tribunal's remit to cover the failure of the commission to make a decision. The right of appeal to the tribunal is triggered by an action of the commission—such as the making of an order or direction, or the decision not to make an order or direction. If this were to extend to failure to make decisions, it would be very difficult to establish the point in the time at which an appeal right should be conferred.
	We have not been persuaded by the noble Lord, Lord Hodgson. We believe that flexibility is the right approach. If noble Lords can find something that is missing and make a case for it, of course, we shall happily consider its inclusion. If we were to accept this amendment it would mean that a substantial series of amendments would have to be tabled to reflect the point in other parts of the Bill. At this stage I do not look forward to that possibility with any great relish. The flexibility that we have works. It will probably work well and serve us well.

Lord Phillips of Sudbury: My Lords, will the Minister give a specific assurance that, if gaps are found in the lists of appeals that should be made, there will be rapid action to put that right? Otherwise people will be prevented from getting their remedy. The noble Lord, Lord Hodgson, makes a powerful point.

Lord Bassam of Brighton: My Lords, of course. If there was an omission we would want to act swiftly. There is no doubt about that.

Lord Hodgson of Astley Abbotts: My Lords, I am grateful to the noble Lord, Lord Phillips, for that intervention. He took the words right out of my mouth. I was going to ask the Minister exactly the same question. I am delighted to hear that assurance.
	I accept the Minister's argument about the problem of consequential amendments if this different approach was adopted. I am bludgeoned to death on this matter. I surrender. I give up. I seek leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Bassam of Brighton: moved Amendments Nos. 47 to 48:
	Page 86, line 2, at end insert—
	"( ) The Commission shall be the respondent to such an appeal."
	Page 87, line 8, at end insert—
	"( ) The Commission shall be the respondent to such an application."
	On Question, amendments agreed to.

Lord Bassam of Brighton: moved Amendment No. 49:
	Page 93, line 42, column 3, leave out "given" and insert "made"

Lord Bassam of Brighton: My Lords, the aim of this minor amendment is to correct an infelicity in the drafting of the Bill. At present the relevant provision refers to an order "given" by the Charity Commission. Properly speaking, orders are "made", not given. This amendment makes the necessary correction. I beg to move.

On Question, amendment agreed to.

Lord Bassam of Brighton: moved Amendment No. 50:
	Page 96, line 4, at end insert—
	SCHEDULE 1D
	Section 2A(4)
	REFERENCES TO CHARITY TRIBUNAL
	:TITLE3:References by Commission
	1 (1) A question which—
	(a) has arisen in connection with the exercise by the Commission of any of its functions, and
	(b) involves either the operation of charity law in any respect or its application to a particular state of affairs,
	may be referred to the Tribunal by the Commission if the Commission considers it desirable to refer the question to the Tribunal.
	(2) The Commission may make such a reference only with the consent of the Attorney General.
	(3) The Commission shall be a party to proceedings before the Tribunal on the reference.
	(4) The following shall be entitled to be parties to proceedings before the Tribunal on the reference—
	(a) the Attorney General, and
	(b) with the Tribunal's permission—
	(i) the charity trustees of any charity which is likely to be affected by the Tribunal's decision on the reference,
	(ii) any such charity which is a body corporate, and
	(iii) any other person who is likely to be so affected.

References by Attorney General

2 (1) A question which involves either—
	(a) the operation of charity law in any respect, or
	(b) the application of charity law to a particular state of affairs,
	may be referred to the Tribunal by the Attorney General if the Attorney General considers it desirable to refer the question to the Tribunal.
	(2) The Attorney General shall be a party to proceedings before the Tribunal on the reference.
	(3) The following shall be entitled to be parties to proceedings before the Tribunal on the reference—
	(a) the Commission, and
	(b) with the Tribunal's permission—
	(i) the charity trustees of any charity which is likely to be affected by the Tribunal's decision on the reference,
	(ii) any such charity which is a body corporate, and
	(iii) any other person who is likely to be so affected.

Powers of Commission in relation to matters referred to Tribunal

3 (1) This paragraph applies where a question which involves the application of charity law to a particular state of affairs has been referred to the Tribunal under paragraph 1 or 2 above.
	(2) The Commission shall not take any steps in reliance on any view as to the application of charity law to that state of affairs until—
	(a) proceedings on the reference (including any proceedings on appeal) have been concluded, and
	(b) any period during which an appeal (or further appeal) may ordinarily be made has ended.
	(3) Where—
	(a) paragraphs (a) and (b) of sub-paragraph (2) above are satisfied, and
	(b) the question has been decided in proceedings on the reference,
	the Commission shall give effect to that decision when dealing with the particular state of affairs to which the reference related.

Suspension of time limits while reference in progress

4 (1) Sub-paragraph (2) below applies if—
	(a) paragraph 3(2) above prevents the Commission from taking any steps which it would otherwise be permitted or required to take, and
	(b) the steps in question may be taken only during a period specified in an enactment ("the specified period").
	(2) The running of the specified period is suspended for the period which—
	(a) begins with the date on which the question is referred to the Tribunal, and
	(b) ends with the date on which paragraphs (a) and (b) of paragraph 3(2) above are satisfied.
	(3) Nothing in this paragraph or section 74A of this Act prevents the specified period being suspended concurrently by virtue of sub-paragraph (2) above and that section.

Agreement for Commission to act while reference in progress

5 (1) Paragraph 3(2) above does not apply in relation to any steps taken by the Commission with the agreement of—
	(a) the persons who are parties to the proceedings on the reference at the time when those steps are taken, and
	(b) (if not within paragraph (a) above) the charity trustees of any charity which—
	(i) is likely to be directly affected by the taking of those steps, and
	(ii) is not a party to the proceedings at that time.
	(2) The Commission may take those steps despite the suspension in accordance with paragraph 4(2) above of any period during which it would otherwise be permitted or required to take them.
	(3) Paragraph 3(3) above does not require the Commission to give effect to a decision as to the application of charity law to a particular state of affairs to the extent that the decision is inconsistent with any steps already taken by the Commission in relation to that state of affairs in accordance with this paragraph.

Appeals and applications in respect of matters determined on references

6 (1) No appeal or application may be made to the Tribunal by a person to whom sub-paragraph (2) below applies in respect of an order or decision made, or direction given, by the Commission in accordance with paragraph 3(3) above.
	(2) This sub-paragraph applies to a person who was at any stage a party to the proceedings in which the question referred to the Tribunal was decided.
	(3) Rules under section 2B(2) of this Act may include provision as to who is to be treated for the purposes of sub-paragraph (2) above as being (or not being) a party to the proceedings.
	(4) Any enactment (including one contained in this Act) which provides for an appeal or application to be made to the Tribunal has effect subject to sub-paragraph (1) above.

Interpretation

7 (1) In this Schedule—
	"charity law" means—
	(a) any enactment contained in, or made under, this Act or the Charities Act 2005, and
	(b) any rule of law which relates to charities, and
	"enactment" includes an enactment comprised in subordinate legislation (within the meaning of the Interpretation Act 1978), and includes an enactment whenever passed or made.
	(2) The exclusions contained in section 96(2) of this Act (ecclesiastical corporations etc.) do not have effect for the purposes of this Schedule.""

Lord Phillips of Sudbury: moved, as an amendment to Amendment No. 50, Amendment No. 51:
	Line 23, at end insert ", and
	(c) the Tribunal may require the whole or a proportion of the fair and reasonable costs of any permitted party to be borne by the Commission."

Lord Phillips of Sudbury: My Lords, in moving Amendment No. 51, I shall speak also to Amendment No. 52. The Government have introduced a new Schedule ID. These useful amendments would allow the Charity Commission or the Attorney-General to refer matters to the tribunal in circumstances where a decision has not yet been reached if they consider that there is an issue of law or policy which warrants it. That, in turn, would entitle the tribunal to allow charity trustees or any other person likely to be affected to become parties to the proceedings.
	I have come across this situation a number of times over the years. When considering an application for charitable status, the commission is put into a quandary over whether a particular application is or is not permissible under current charity law. With the advent of the tribunal and with this permissive power, I do not doubt some cases will avail themselves of the opportunity to have the tribunal answer a difficult question for them. That is the whole point. It could work unfairly for a charity pursuing an application for status if it found itself caught in the middle of a test case for a whole category of would-be charities. In those circumstances, an individual party would be affected. It would want to make representations because a particular case would also be its suit, albeit that it would represent the test for a category of similar potential cases.
	If the Attorney-General throws his hat into the ring, that is fine. He will take up cudgels for the would-be applicant. But if he does not, the applicant would be drawn into what inevitably would be highly expensive legal proceedings. My amendment—Amendments Nos. 51 and 52 are essentially the same save that one applies to a reference made by the commission and the other by the Attorney-General—would give the tribunal the discretion to decide whether, in all the circumstances, it thought it fair and reasonable for part or all of the costs of the party involved to be paid by the commission or the Attorney-General. I hope that the amendments commend themselves and I beg to move Amendment No. 51.

Lord Bassam of Brighton: My Lords, as with proceedings under the tribunal's other two functions, appeals and reviews, we propose that in general each party should bear its own costs. The amendment of the noble Lord, Lord Phillips, would give the tribunal an extra power to order the Attorney-General or the commission, as the case may be, to pay the other party's costs. However, we do not think that that is necessary or desirable. Proceedings on references to the tribunal would generally not be adversarial since in essence the purpose would be to help to clarify the law where the commission has not yet made a decision. An affected person or charity wanting to have their own view of the law taken into account by the tribunal may join himself as a party and will be able to ensure that his view is put across to the tribunal. By choosing that route, the person or charity will not need to pay his own costs if he decides to do that. But he need not join himself as a party since either the Attorney-General or the commission represented, will not incur any costs in the proceedings, but will still have their view taken into consideration.
	We do not think that this provision is necessary because it is covered. Simply to force an extra power on the Attorney-General, which would be the effect of the amendment, would not be a desirable end in itself.

Lord Lyell of Markyate: My Lords, may I intervene very briefly on this point?

Lord Phillips of Sudbury: My Lords, I am deeply sorry that the former Solicitor-General cannot say his piece, but so be it.
	The Minister said that the tribunal hearing would not be adversarial. That would depend on what he means. The argument will have two sides or it would not be brought before the tribunal. He went on to say that the commission will ensure that the would-be charity's view can be put across. But I have to say that that is an unsafe assumption. If the tribunal hears an argument in respect of what might be called a frontier charity, it is more helpful if it is able to hear from the parties on both sides of the argument rather than to expect one advocate to present both sides; that is, I believe that the tribunal proceedings themselves would be diminished in their effectiveness unless the traditional two sides of the argument are presented. That need not be adversarial. It can be an exploratory hearing.
	Finally, the Minister said that my amendment would force the Attorney-General. It would not force anyone to do anything, rather it is merely a discretion for the tribunal, in the particular circumstances, to come to the aid of the party that finds itself in the middle of a fascinating but extremely expensive case. I am disappointed that the Minister will not concede and accept the amendment at this stage. I would be grateful if he would read my response with a view conceivably to coming back with something at Third Reading. For the moment, however, I beg leave to withdraw the amendment.

Amendment No. 51, as an amendment to Amendment No. 50, by leave, withdrawn.
	[Amendment No. 52, as an amendment to Amendment No. 50, not moved.]
	On Question, Amendment No. 50 agreed to.
	Clause 9 [Registration of Charities]:

Lord Hodgson of Astley Abbotts: moved Amendment No. 53:
	Page 11, line 37, leave out "£5,000" and insert "£10,000"

Lord Hodgson of Astley Abbotts: My Lords, the amendment concerns the minimum level of annual income at which charities are required to register with the commission. We have debated this previously, but I make no apology for returning to the important topic of deregulation and reducing the regulatory burden. However, given that it has been debated previously, I shall be as brief as possible.
	Simply put, the amendment would increase the level of annual income at which charities must register with the commission from £5,000 to £10,000. I make it clear that this does not prevent any charity, of whatever size, applying to be registered. The Government—again, I thank the Minister—kindly accepted my earlier amendment which stated that any charity may apply to be registered and the commission must accept that application, which was not previously the case. So it is not—I repeat, not—a question of smaller charities being unable to register and, because they have no charity number, being precluded from receiving funding from many bodies in both the public and private sectors which will give grants only to charities which are registered.
	On the contrary, my amendment would reduce the regulatory burden for both charities and the Charity Commission. If a charity has an annual income of, let us say, £7,500, this would imply capital assets of probably less than £200,000—perhaps £150,000—but such a charity would have to register under this Bill as it presently stands. I understand, indeed I support, the Government's wish to maintain confidence in the charity sector, but small charities of the type that I have just given as an example do not offer any systemic risk or threat to public confidence. If a charity with an annual income of less than £10,000 does not want to register, why should it? The risk-reward ratio and the regulatory burden implied by the Bill as drafted are out of kilter. Even the original report by the Strategy Unit on which much of this Bill was based recommended a figure of £10,000 as being that at which registration should take place. It felt that that was the appropriate level and I see no reason to disagree with it.
	Noble Lords on all sides of the House, including those on the government Front Bench, are inclined to talk on and on about the need to decrease the regulatory burden, but too often, when we have a practical opportunity to do it, we shy away. I hope the Minister will not fall back on the argument that my amendment is superfluous because there is going to be a review of all thresholds 12 months after Royal Assent. This is a matter which needs action now. I beg to move.

Lord Phillips of Sudbury: My Lords, it is with some diffidence that I oppose the noble Lord, Lord Hodgson, because he puts the case strongly and well, and we all genuinely want to diminish the bureaucratic burden on smaller charities. My reason for not being convinced by his case is very simple. There is the issue of bureaucracy and regulation; there is the issue of probity of charities in the sector. I did not agree with the noble Lord when he said that there was no systemic risk. I do not know why he said that or on what basis. If you are talking about an income of £10,000 a year, that could mean a capital base of £200,000, which is significant money. In fact, there is more prospect of the very rare amount of fraud that takes place in the charity sector among small charities than among large charities. Assets of £200,000 are very significant. In my balance between probity and regulation, I think that I am more satisfied, or assuaged, by the £5,000 limit rather than the £10,000 limit. For that reason, I am not persuaded by what the noble Lord has said.

Lord Swinfen: My Lords, the noble Lord, Lord Phillips, makes an interesting point because Clause 3(5)(c) of the 1993 Act refers to,
	"any charity which has neither—
	(i) any permanent endowment, nor
	(ii) the use or occupation of any land,
	and whose income from all sources does not in aggregate amount to more than £1,000 a year".
	I liked what my noble friend Lord Hodgson said but I wonder if he would be prepared to combine it by bringing forward another amendment at Third Reading to bring in the capital assets of the charity. I can see that the capital assets of a charity need to be protected. I agree with that. I have never argued against that. Such a measure could help assuage the fears of the noble Lord, Lord Phillips. Otherwise, I support my noble friend's amendment.

Lord Bassam of Brighton: My Lords, I am sympathetic to the noble Lord's amendment; I can certainly see its merits. I am reluctant to go over the ground that we have trodden on this matter before. However, it is worth reiterating that we have created flexibility here. The threshold can be altered by a statutory instrument—primary legislation will not be necessary. However, we believe that any change to the threshold should be introduced after proper and full consideration. We need to consult properly. We arrived at this figure as a fruit of consultation. It is accepted by the sector. The sector would probably want to have its feelings listened to if a change were contemplated. As the noble Lord will have anticipated, that rather forces me back on my point about our commitment to there being a review of all thresholds in the Bill a year after Royal Assent. A year is not too long a period. It will enable consultation to be carried out and fair consideration to be given to the matter. The point about protecting capital sums is an interesting and important one. Clearly, that may well feature in the review.
	As I say, I have sympathy for the proposition but under the circumstances, and given that we have the flexibility we need to deal with this matter in the future, I must continue to resist the amendment.

Lord Hodgson of Astley Abbotts: My Lords, the Minister is as eloquent as ever. I wish to reply to the point made by the noble Lord, Lord Phillips. When I talk about systemic risk or threat to public confidence, I regard that as being posed by malfeasance on the part of a large national charity with which everyone is familiar and which receives substantial national publicity. I do not accept, and thoroughly deplore, malfeasance at any level on the part of any charity of whatever size. However, is one going to create a bureaucratic structure which will impose huge burdens on all charities and probably not catch anything much but just involve a lot of form filling and bureaucracy?
	I accept the point that my noble friend Lord Swinfen made; it was entirely fair. However, I would like that matter to comprise a part of the review in 12 months' time. I would like the measure that we are discussing to be implemented now and for us to see how it fares. If my supposition is wrong and the noble Lord, Lord Phillips, is right and we introduce an asset test, my view is that after a year we will find that there have been absolutely no cases at all. However, that is just a guess. I wish to strike a blow for deregulation. I wish to test the opinion of the House.

On Question, Whether the said amendment (No. 53) shall be agreed to?
	Their Lordships divided: Contents, 19; Not-Contents, 45

Resolved in the negative, and amendment disagreed to accordingly.
	Clause 18 [Cy-près schemes]:

Lord Phillips of Sudbury: moved Amendment No. 54:
	Page 18, line 37, leave out "social and economic"

Lord Phillips of Sudbury: My Lords, Amendment No. 54 is innocuous. It calls on the Government to drop the words "social and economic" from a part of the cy-près scheme arrangements of Clause 18. Put simply, the wording is relevant to the matters that the High Court or the Charity Commission must take into account when making a cy-près scheme. They include the spirit of the original gift, the desirability of securing that the property is applied for charitable purposes and the wording to be amended,
	"the need for the relevant charity to have purposes which are suitable and effective in the light of current social and economic circumstances".
	All one need say, and should say, is "suitable and effective in the light of current circumstances". The phrase "social and economic" is redundant, and confines the circumstances that can be considered in the making of a scheme. It id cramping, because there are many circumstances that are neither social nor economic. Why on earth should the court or the commission be confined to considering suitability in the light of current circumstances? It is a simple point, and I cannot see any answer to it, but that is not to say the noble Lord, Lord Bassam, will not attempt to find one. I beg to move.

Lord Hodgson of Astley Abbotts: My Lords, my name is to this amendment, but, having taken up some of the House's time over the last one, I will just say I agree with every word the noble Lord, Lord Phillips, has said, and I hope the Government will accept it.

Lord Swinfen: My Lords, surely the words that the Government have included in the Bill are otiose, because "social and economic" would be included in "circumstances".

Lord Bassam of Brighton: My Lords, we do not agree. We are entitled to disagree. This version of the Bill took account of our earlier debates in March by amending the clause so the commission would have regard to the need for a charity to have purposes that were suitable and effective in the light of current social and economic circumstances. Previously the requirement would have been to have regard to the need for the charity to be able to make "significant social or economic impact".
	This is not the biggest issue we have had to consider, but it is important that we have some context in which to root the way in which these issues are considered. "Social and economic" is fine. I could think of words to add, and can see that there may be other things that could be put in there, but the phrase is a fair catch-all. I do not agree with the noble Lord, Lord Phillips, that it is restrictive and narrowing, which is certainly not the intention of the Government.
	We think this flexibility goes far enough in allowing charities to develop in response to social and economic changes in society, and to provide for the needs of those who, by virtue of their financial position, can benefit most from charitable activity. The amendment proposed by the noble Lord extends this further by making unlimited this limb of the matters to which the commission must have regard, rather than constrained in this context. We do not want to do that.
	Our view is that, when using these provisions, the courts and the commission must have a greater focus on what is important; that is, the social and economic circumstances in which charities operate. There may well be circumstances wider than social and economic that could influence a decision, such as the effect of lobbying from particular interest groups in the locality including political groups, which it would not be appropriate to take into account. We believe the circumstances must be clearly defined, and an emphasis on society and on economic needs is the right limitation to adopt.
	This clause also reflects the provisions of the earlier Clause 15, which defines when it is appropriate to make a change of this sort, rather than what the change should be. We would like to maintain this similarity and consistency of approach.
	The amendment goes too far. We have something that is flexible enough, and can be operated in a way that excludes things that may be undesirable. "Social and economic" seems to me to be commonly understood, and makes a lot of sense. We continue to resist the amendment.

Lord Phillips of Sudbury: My Lords, I am depressed. How the Minister can say that "social and economic" is a catch-all phrase is beyond my understanding. In an arts or theatre charity, cultural and artistic circumstances would be relevant. The delimitation of the words is contained in a subsection dealing with the needs of the relevant charity to have purposes which are suitable and effective. Those are intentionally general words because one is dealing with all kinds of charities. It would not be relevant for an animal charity to look at the social and economic circumstances. In any event, it is no good going on about it. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Phillips of Sudbury: moved Amendment No. 55:
	Before Clause 20, insert the following new clause—
	"COMMUNICATING DETAILS AND GROUNDS OF PROTECTIVE ORDERS
	After section 18(2) of the 1993 Act (power to act for protection of charities) insert—
	"(2A) The Commission must send a copy of any order made by it under subsection (1) or (2) above and particulars of the broad grounds of its satisfaction that the preconditions for making the same have been met—
	(a) to the charity concerned (if a body corporate), or
	(b) (if not) to each of the charity trustees.
	(2B) The copy or copies and the particulars must be sent to the charity or charity trustees as soon as practicable after the making of the order.
	(2C) The Commission need not, however, comply with subsection (2B) above as to the copy order or the particulars (or both) if it considers that to do so—
	(a) would prejudice any inquiry or investigation, or
	(b) would not be in the interests of the charity;
	but, once the Commission considers that this is no longer the case, it must send the copy or copies or the particulars (or both) to the charity or charity trustees as soon as practicable.""

Lord Phillips of Sudbury: My Lords, the amendment is designed to ensure that where a manager or receiver is appointed by the commission, the charity should be informed of the appointment and of the broad grounds for it unless there are good grounds for withholding the information; for example, where there would be prejudice to the work of the manager or receiver or where it would not be in the interests of the charity.
	When I looked at the matter in more detail, I discovered that although Section 18 of the 1993 Charities Act gives a whole tranche of fundamental powers for the Charity Commission to act in protection of charities, there was no comparable clause relating to the commission if it were appointing new trustees, vesting property in a custodian or ordering a debtor not to make payment to the charity to which the debt was owed and so forth. The amendment would require the commission to send a copy of the order to the charity concerned or, if it were a body corporate, to the charity trustees. At the same time, it must give particulars of the broad grounds upon which it has acted under Section 18.
	It seems to me that on human rights grounds there is a severe injustice and probably a breach of human rights requirements if the trustees and the charity are unaware of the making of an order so pregnant for their own charity and custodianship of it. They should know the broad grounds on which the order has been made. I tabled the amendment in an attempt to bring the Charities Act 1993 up to date and in alignment with the amendment the Government are inclined to accept for managers and custodians. I hope that it commends itself to the Government. I beg to move.

Lord Bassam of Brighton: My Lords, we are grateful to the noble Lord for tabling the amendment and for his explanation of it. I hope that he will consider what I am about to say as a positive response.
	We believe that the requirements of procedural fairness under the general law are likely to require the Charity Commission to supply reasons in such cases where it makes an order affecting a charity. As I have said on previous occasions, other than when it would prejudice an inquiry into a charity, it is the commission's usual practice to inform the trustees of why it has taken any significant action using its protective powers. The commission also provides the trustees with information about how to ask the commission formally to review a decision which it has made and about statutory rights of appeal.
	I appreciate that several of your Lordships have pressed for a statutory requirement to give reasons in relation to several of the commission's protective powers. We tabled two amendments specifically in relation to the appointment of interim managers under Section 19 of the 1993 Act and the new power in Clause 20 of the Bill to give specific directions for the protection of the charity, the first of these specifically requiring the giving of reasons. We are therefore familiar with the territory.
	However, after further consideration, we believe that it would be better to have a consistent statutory approach covering all the commission's protective powers in Section 18 of the 1993 Act and new Sections 19A and 19B inserted into that Act by this Bill. As a result we have withdrawn the proposed government amendments relating to the two specific powers. We propose to consider this further and return at Third Reading with a suitable amendment. That amendment would require the commission to give a copy of the order, and the reasons for making it, to the charity if incorporated or the trustees if unincorporated.
	However, there should still be the caveat that the commission need not comply with either requirement so long as it considered that to do so would either prejudice any inquiry or investigation, or not be in the interests of the charity. That is quite an important further consideration. We also want to bear in mind that the Lord Chancellor's rules will provide the requirement for notification of appeal rights to the tribunal, and that this should work compatibly with any requirement to provide reasons.
	I hope that the noble Lord accepts that as a positive response; I think it certainly is, and I think it probably satisfies what the noble Lord is after.

Lord Phillips of Sudbury: My Lords, I am most grateful and that indeed satisfies what I was getting at. I am sure that it will make for a much better Bill and an improvement to the 1993 Act. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	Clause 20 [Power to give specific directions for protection of charity]:

Lord Bassam of Brighton: moved Amendment No. 56:
	Page 20, line 26, leave out "of any other person arising in respect of" and insert "arising in connection with"

Lord Bassam of Brighton: My Lords, Clauses 20 and 21 provide the commission with powers to give directions which it considers expedient in the interests of the charity and to direct the application of charity property. In an earlier discussion of these powers on 14 March we considered the effect that acts of trustees complying with such directions might have on third parties. The matter was raised, not unusually, by the noble Lord, Lord Phillips, and we agreed that the rights of a third party should not be adversely affected, notwithstanding that the commission must rightly be able to act effectively to protect charity and to direct the application of charity property. Having thought about this matter, we added a subsection to each of the new sections dealing with these powers—new Sections 19A(5) and 19B(5).
	On reflection we see that those amendments did not quite achieve what we wanted them to. The intention here is to enable the commission to act when it needs to do so, to ensure that anyone acting in compliance of the commission's directions can do so, and to ensure that rights arising in connection with compliance with a direction are preserved.
	We recognise that for these powers to be effective, the commission will in some cases make a direction which affects others. This is the intention. Those others may be the people required to act on the directions or any other third parties who may be involved either directly or indirectly. An example of a direct effect to a third party could be a direction to trustees to close a particular project because running that project was outside the purposes of the charity. If the charity employed staff in connection with the project, their contracts of employment would be affected. An example of an indirect effect would be where the commission directed that a particular asset be transferred from one charity to another. In both cases, contractual or other rights could arise in connection with compliance with the commission's direction.
	As these examples show, situations arise when a particular action must be taken to protect a charity or its property. The consequences of that action, for all concerned, should be dealt with fairly.
	These amendments will preserve the contractual and other rights which arise in connection with anything which has been done under the authority of a direction of the commission. These could be rights of the charity itself or of a third party. These amendments would preserve rights arising in the event that a contract were frustrated as a result of compliance with a direction of the commission. Where a frustrating event occurs, rights arising are mainly dealt with under the Law Reform (Frustrated Contracts) Act 1943, although some cases are dealt with under the common law. I would like to make it clear that where compliance with an order under either of these sections has the effect of discharging by frustration a contract to which the charity or its trustees are party, it is not the intention behind the amendment that the charity or its trustees should be treated as if it or they had been in breach of the contract.
	I recognise that this is a rather detailed explanation and probably noble Lords will want to have another look at it in the Official Report. If upon reflection any noble Lord would like a further explanation on any point I should be more than happy to provide it. I beg to move.

Lord Phillips of Sudbury: My Lords, I am grateful for the Minister's explanation and for the way that my concerns at an earlier stage have been dealt with by these amendments.

On question, amendment agreed to.
	Clause 21 [Power to direct application of charity property]:

Lord Bassam of Brighton: moved Amendment No. 57:
	Page 21, line 10, leave out "of any other person arising in respect of" and insert "arising in connection with"
	On Question, amendment agreed to.
	Clause 26 [Power to enter premises and seize documents etc.]:

Lord Bassam of Brighton: moved Amendment No. 58:
	Page 26, line 31, at end insert ", and the names of any such persons"

Lord Bassam of Brighton: My Lords, in moving Amendment No. 58, I shall speak also to Amendment No. 60 and I hope it will be convenient if I respond in advance to Amendment No. 59, which is tabled in the name of the noble Lord, Lord Hodgson.
	Clause 26 provides a new power for a member of staff of the Charity Commission to enter premises and seize documents and other information where a magistrate has issued a warrant. The Bill currently requires the Charity Commission staff member who enters premises under the warrant to prepare a written record of particular facts and activities and of the items seized. If requested to do so he must give a copy of the record to the occupier, or someone acting on behalf of the occupier. However, the Bill does not currently specify when the record must be prepared or given.
	We have had generally a very healthy debate about this power. I think that it can fairly be said that we have already included a number of safeguards in response to understandable concerns that have been raised. These amendments further extend those safeguards.
	In Committee, the noble Lord, Lord Swinfen, suggested that the record required by subsection (6) should include the names of the persons accompanying the person authorised under the warrant. We agree with that and have brought forward Amendment No. 58 to give effect to it.
	Amendment No. 60 responds to the concerns raised in Committee that the record should be prepared by the commission's member of staff whilst he or she is on the premises and given to the occupier, or his representative, if requested before leaving the premises, unless in either case it is not reasonable or practical to do so.
	However, it is only fair to say that I have some difficulty with Amendment No. 59, which is proposed by the noble Lord, Lord Hodgson of Astley Abbotts. It would place the commission's member of staff under a duty to provide the record to the occupier, regardless of whether or not the record was requested. As I have said in previous debates, the reason this clause gives the occupier a right to ask for the record, rather than putting the commission member under a duty to provide it without being asked, is that the commission member may not know who the legal occupier is, and therefore would not know to whom the record should be given.
	The Bill as drafted leaves it to the occupier or someone acting on his behalf to identify himself or herself and to require production of the record, which, under our Amendment No. 60, the commission member would be required to provide prior to leaving the premises. It is because we believe that this practical difficulty could arise, and in the knowledge that our government amendments will further strengthen the safeguards in this clause, that I suggest that the noble Lord, Lord Hodgson, when he moves his amendment, considers the position again and withdraws the amendment. I beg to move.

Lord Hodgson of Astley Abbotts: My Lords, we have been around this particular issue in the past. I recognise that the Government have made substantial steps to even out the balance which exists in those new and fairly draconian powers. The Law Society among others circulated amendments which, in large measure, the Government have now accepted.
	Having had the preview—the trailer before the main feature, so to speak—I accept the problem about the Charity Commission's staff knowing who the occupier is. However, I would have thought that some of that would have been obviated by the fact that we are talking about entry in respect of premises where the operations of the particular charity take place, and therefore that charity either has directors if it is a company or trustees if it is not a company. Serving a notice on them might be a way around that problem.
	My difficulty is with:
	"If required to do so",
	which my amendment seeks to leave out. The problem is with exactly who has to do the requiring? Must it be someone on the premises? Can it be done by phone, fax or e-mail? Should it not be an automatic requirement for the commission to have to give a copy to somebody connected with the charity, whose premises it is presumably entering to examine or investigate?
	One of the troubles is that these powers cover domestic as well as business premises. As we have heard from many noble Lords during our debates, many charities are run from trustees' homes. Faced with a search, which by its very nature will be abrupt and sudden and may well be of his or her home, what concerns me is how an unsophisticated trustee will know that he or she is entitled to ask for such a record. I was hoping that the Minister would be able to find some way through this, except for the difficulty he has perfectly fairly posed—that in the event of the occupier not being clear, the commission would have to serve the notice on an official of the charity in question, such as a director or trustee.
	The noble Lord, Lord Phillips, has talked about small, local charities. Such people are unsophisticated and will not know their rights. This is going to be a pretty brutal occasion where the door is opened and people come to look through the house, and I doubt if they will know that they can ask for these particular documents. Excepting the practical difficulty that the Minister has quite rightly drawn to our attention, I hope that he will find a way at least to make sure that some official of the charity which is being investigated—be it a trustee or director—will have to get a copy of what has gone on, as provided by new Section 31A(6). That will be a good way to get round the problem with difficulties of identification that the Minister has drawn to our attention.

Lord Swinfen: My Lords, I wonder if I may raise a point which is not strictly on the amendment that is being moved but on new Section 31A(9) in Clause 26, because the wording is really rather clumsy. It reads:
	"Once it appears to the Commission that the retention of any document or device has ceased to be so necessary, it shall arrange for the document or device to be returned as soon as is reasonably practicable".
	It goes something like this: "Joe, when you are next in the area of such and such, would you mind dropping in this bundle of papers?". It is really a rather careless way of dealing with the issue.
	I am not asking for an answer now because I am throwing a fast ball at the Minister and it is late at night. But could he please have a look at this and make the wording far more positive, such as "the commission shall return the document", not "arrange" for it "to be returned"? The wording on the Bill is not firm enough and it does not put the onus on the commission to make sure that the documents or devices are returned. I know that this cannot be dealt with in this House at this stage, and cannot be dealt with at Third Reading because it would be a new matter, but perhaps the Minister could have a look at it and have the matter seen to in the other place.

Lord Phillips of Sudbury: My Lords, I support what the noble Lord, Lord Hodgson, said. I agree with him entirely that, in reality, occupiers of premises will not know their rights under these provisions. Will the Minister take counsel on whether there should be a practice, at least, of leaving a notice at the premises concerned—it could be posted through the door—indicating that there are rights under the legislation for the occupier to have copies of the matters concerned, so that even if that does not happen at the occupier's request at the time, he or she will be aware that one can ask for them after the event? It is not a small matter. It is too true that many people have no clue about what the law is. Can the Minister give us any comfort on that?

Lord Bassam of Brighton: My Lords, looking at the wording, and in the light of the remarks of the noble Lord, Lord Swinfen, I would like to give the matter more thought. I am grateful for the noble Lord's suggestion that I respond in writing, as that would be a more appropriate approach. Having listened to all three noble Lords' remarks, I think that we have reached the end of the road in terms of what we can achieve by amendment.
	I understand the point that the noble Lord, Lord Hodgson, makes. Such situations can be very confusing. Most cases will not involve a knock on the door at night, but they will probably involve some discomfort to those whose premises are searched. As the noble Lord, Lord Phillips, said, in the real world people probably will not know their exact rights in the circumstances. There may be confusion about who is responsible for what. There might be a relative wandering around who has absolutely nothing to do with the circumstances of the search.
	The situation would probably be best dealt with in guidance. The noble Lord, Lord Phillips, has made the point several times previously, and I do not disagree with him, that more must be done to ensure that trustees, directors and others involved with charities are more aware of their rights and responsibilities. I want to give the matter further thought. I do not think that we can perfect any amendments that give any greater comfort or security to those who might be affected. However, we are sympathetic to the issue, which is why we have moved in the general direction that we have taken in our amendments, and tried to take on board concerns expressed at earlier stages.
	That is about as far as I can go today. Having said that, I want to press our amendments, and I hope that the noble Lord, Lord Hodgson, will withdraw his, because we have made progress. We will see what more can be achieved administratively and in guidance.

On Question, amendment agreed to.
	[Amendment No. 59 not moved.]

Lord Bassam of Brighton: moved Amendment No. 60:
	Page 26, line 38, at end insert—
	"( ) Unless it is not reasonably practicable to do so, the authorised person must comply with the following requirements before leaving the premises, namely—
	(a) the requirements of subsection (6), and
	(b) any requirement made under subsection (7) before he leaves the premises."
	On Question, amendment agreed to.

Lord McKenzie of Luton: My Lords, I beg to move that consideration on Report be now adjourned.

Moved accordingly, and, on Question, Motion agreed to.
	House adjourned at ten o'clock.

Wednesday, 12 October 2005.